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Why you should commence your Hornsea lease extension


Why you should commence your Hornsea lease extension today:

A Hornsea lease depreciates with the years remaining on the lease.

Hornsea leases on domestic properties are gradually losing value. if your lease has about ninety years unexpired, you should start considering the need for a lease extension. An important point to note is that it is financially advisable for a lease extension to be in place before the term of the current lease falls under eighty years - otherwise a higher premium will be payable. Leasehold owners in Hornsea will mostly be legally entitled to a lease extension; however It would be wise to check with a conveyancer to confirm if you qualify. In certain cases you may not be entitled. There are prescribed timetables and steps to follow once the process is initiated so it’s best to be guided by a lawyer during the process.

An extended lease has roughly the same value as a freehold

It is generally considered that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.

Lenders may not lend with a short lease

Banks and building societies are really restricting their approach as regards to homes in Hornsea with short leases. For example you might discover that their lending criteria are stricter and that they alter interest rates depending on how many years are left on the lease. Some may even refrain from lending completely, so if you needed to sell, your remaining options would be to find a cash buyer, or try your luck at auction thus reducing the amount of prospective buyers.

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.
Bank of Scotland Minimum 70 years from the date of the mortgage.
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.
National Westminster Bank Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.
Skipton Building Society 85 years from the date of completion of the mortgage

For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary

Why use us for your lease extension in Hornsea?

The lawyers 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 lawyer we work with provide it.

Hornsea Lease Extension Case Studies:

Finn, Hornsea, East Yorkshire

Two years ago Finn, came dangerously near to the eighty-year mark with the lease on his ground floor flat in Hornsea. In buying his flat 18 years previously, the lease term was of little significance. As luck would have it, he noticed he needed to take steps soon on a lease extension. Finn extended the lease just under the wire in June. Finn and the landlord eventually settled on sum of £5,000 . If he not met the deadline, the sum would have become more exhorbitant by at least £1,000.

Hornsea case:

Last year we were contacted by Dr J Hall , who bought a basement flat in Hornsea in February 2011. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Identical properties in Hornsea with 100 year plus lease were valued about £218,000. The mid-range amount of ground rent was £45 collected per annum. The lease ended on 8 May 2084. Taking into account 63 years remaining we calculated the premium to the freeholder to extend the lease to be within £17,100 and £19,800 plus professional charges.

Hornsea case:

In 2010 we were contacted by Mr C Rivera who, having moved into a garden apartment in Hornsea in August 1997. We are asked if we could approximate the price would likely be to extend the lease by ninety years. Comparable properties in Hornsea with an extended lease were worth £265,000. The mid-range amount of ground rent was £55 collected yearly. The lease terminated in 2095. Considering the 74 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of expenses.