With a residential leasehold premises in Hove, you are actually purchasing a right to live in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are fewer than 80 years remaining. Leasehold owners in Hove with a lease nearing 81 years left should seriously think of extending it without delay. Once the lease term has fewer than 80 years remaining, under the current Act the freeholder can calculate and charge a larger amount, assessed on a technical computation, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you enhanced control over the value of your Hove leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Arthur was the the leasehold owner of a conversion apartment in Hove being marketed with a lease of just over 59 years outstanding. Arthur on an informal basis contacted his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Arthur to exercise his statutory right. Arthur obtained expert advice and secured satisfactory resolution informally and sell the property.
Last Christmas we were called by Mr and Mrs. H Wood , who owned a one bedroom flat in Hove in April 1997. The question was if we could estimate the premium would likely be for a 90 year lease extension. Comparative residencies in Hove with an extended lease were valued around £275,000. The average ground rent payable was £65 invoiced per annum. The lease came to a finish in 2094. Taking into account 68 years unexpired we estimated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 plus fees.
Last Summer we were contacted by Dr B Cooper , who bought a purpose-built flat in Hove in October 2010. We are asked if we could approximate the premium would be to extend the lease by a further 90 years. Comparative properties in Hove with 100 year plus lease were in the region of £213,600. The average ground rent payable was £60 collected annually. The lease came to a finish in 2083. Considering the 57 years left we approximated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 not including legals.