The only way is down when it comes to Hornsea lease terms. Hornsea flats that have a remaining term less than than 80 years will reduce in market price even faster, and the cost of extending your lease will increase.
Leasehold residencies in Hornsea with in excess of one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancing solicitors that we work with undertake 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 conveyancer we work with provide it.
Andrew owned a studio apartment in Hornsea being marketed with a lease of fraction over 61 years unexpired. Andrew informally approached 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 doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Andrew to exercise his statutory right. Andrew obtained expert advice and secured satisfactory resolution without resorting to tribunal and sell the property.
In 2010 we were called by Mrs I Flores who, having purchased a studio apartment in Hornsea in October 2012. We are asked if we could estimate the premium would likely be to prolong the lease by 90 years. Similar residencies in Hornsea with a long lease were worth £218,000. The average amount of ground rent was £45 collected annually. The lease ended in 2089. Considering the 63 years remaining we approximated the compensation to the freeholder for the lease extension to be between £17,100 and £19,800 plus legals.
Last Christmas we were phoned by Mrs Abigail Rose , who purchased a one bedroom flat in Hornsea in February 2010. The question was if we could shed any light on how much (roughly) price would likely be for a ninety year extension to my lease. Comparative residencies in Hornsea with a long lease were valued about £270,000. The mid-range amount of ground rent was £55 collected per annum. The lease ran out in 2100. Taking into account 74 years unexpired we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus legals.