Hornsea leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Hornsea tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Hornsea you must check if your lease has between seventy and 90 years left. There are good reasons why a Hornsea leaseholder with a lease having around 80 years left should take steps to ensure that a lease extension is effected without delay
Leasehold properties in Hornsea with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Engaging our service gives you increased control over the value of your Hornsea leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Luca owned a studio apartment in Hornsea being marketed with a lease of a little over 61 years left. Luca informally spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Luca to exercise his statutory right. Luca obtained expert advice and secured satisfactory resolution without resorting to tribunal and readily saleable.
In 2014 we were e-mailed by Ms Kelsey Pérez who, having owned a recently refurbished flat in Hornsea in August 2004. We are asked if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Similar residencies in Hornsea with a long lease were worth £186,000. The average amount of ground rent was £65 invoiced every twelve months. The lease concluded in 2083. Taking into account 58 years unexpired we approximated the compensation to the landlord to extend the lease to be between £24,700 and £28,600 exclusive of legals.
Last year we were contacted by Dr G Moreau , who acquired a ground floor apartment in Hornsea in April 1995. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparative residencies in Hornsea with 100 year plus lease were worth £250,000. The mid-range ground rent payable was £50 collected annually. The lease concluded on 2 June 2094. Taking into account 69 years outstanding we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus costs.