For those whose Hornsea flat is held on a long lease, the message is clear – if nothing is done, the property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers 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.
Dexter was the the leasehold proprietor of a studio apartment in Hornsea on the market with a lease of a little over sixty years unexpired. Dexter on an informal basis approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder 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 25 years thereafter. No ground rent would be payable on a lease extension were Dexter to exercise his statutory right. Dexter obtained expert advice and secured an acceptable resolution informally and sell the property.
In 2010 we were approached by Ms Niamh Smith who, having was assigned a lease of a studio apartment in Hornsea in October 2004. We are asked if we could approximate the price would likely be to extend the lease by 90 years. Comparative premises in Hornsea with an extended lease were worth £168,800. The average ground rent payable was £60 collected quarterly. The lease finished on 2 August 2080. Considering the 55 years unexpired we approximated the premium to the landlord for the lease extension to be between £31,400 and £36,200 not including legals.
Dr K Morel purchased a garden flat in Hornsea in November 1996. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Similar homes in Hornsea with a long lease were in the region of £235,200. The average ground rent payable was £45 collected annually. The lease elapsed on 1 October 2091. Taking into account 66 years left we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 plus costs.