The closer a residential lease in Hove nears to zero years unexpired, the more it reduces the value of the property. If the residual term has, beyond 100 years to run then this decrease may be fractional however there will become a stage when a lease has less than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary reason why you should extend the lease sooner rather than later. Most flat owners in Hove will meet the qualifying criteria; that being said a conveyancing solicitor can advise whether you are eligible to extend your lease. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold properties in Hove with more than one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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 |
Retaining our service will provide you increased control over the value of your Hove leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted negotiations with the landlord of her garden flat in Hove, Maisie initiated the lease extension process just as the lease was approaching the critical 80-year mark. The legal work completed in June 2005. The freeholder’s costs were kept to an absolute minimum.
In 2009 we were contacted by Mr and Mrs. E Leroy who, having bought a studio apartment in Hove in January 2004. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable residencies in Hove with 100 year plus lease were valued about £233,200. The mid-range ground rent payable was £60 billed per annum. The lease ran out on 20 August 2087. Taking into account 61 years remaining we estimated the premium to the freeholder to extend the lease to be within £22,800 and £26,400 plus costs.
In 2009 we were approached by Mrs Erin Bennett who, having was assigned a lease of a one bedroom flat in Hove in February 2006. The question was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Identical homes in Hove with an extended lease were valued around £171,800. The average amount of ground rent was £55 collected annually. The lease finished in 2076. Having 50 years left we calculated the premium to the landlord to extend the lease to be between £33,300 and £38,400 not including legals.