Hornsea residential property owned on a long lease is a wasting asset because a leaseholder merely owns the property for a set term.
Leasehold properties in Hornsea with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure Hornsea lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Last Winter Jackson, started to get near to the 80-year threshold with the lease on his basement flat in Hornsea. In buying his property two decades ago, the unexpired term was of minimal importance. Luckily, he noticed he needed to take action soon on Extending the lease. Jackson extended the lease at the eleventh hour last August. Jackson and the landlord eventually settled on an amount of £5,500 . If the lease had dropped lower than eighty years, the amount would have gone up by a minimum £975.
Last Autumn we were e-mailed by Mr and Mrs. M Cox , who moved into a one bedroom flat in Hornsea in April 2012. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Comparable flats in Hornsea with 100 year plus lease were in the region of £227,800. The average amount of ground rent was £45 collected quarterly. The lease elapsed in 2091. Considering the 65 years as a residual term we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 not including fees.
Mr and Mrs. I Gómez owned a recently refurbished flat in Hornsea in May 1999. The question was if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical homes in Hornsea with an extended lease were valued about £270,000. The mid-range ground rent payable was £55 billed monthly. The lease came to a finish in 2101. Having 75 years remaining we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.