It’s an underpublicised truth that a Leigh On Sea residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Leigh On Sea property market.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Leigh On Sea will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold properties in Leigh On Sea with over one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| 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 |
| Yorkshire 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. |
Engaging our service will provide you better control over the value of your Leigh On Sea leasehold, as your property will be more valuable and saleable in relation to the 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.
Oscar was the the leasehold proprietor of a high value flat in Leigh On Sea being sold with a lease of fraction over 72 years left. Oscar informally approached his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 yearly. No ground rent would be payable on a lease extension were Oscar to invoke his statutory right. Oscar obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
In 2014 we were phoned by Dr W Fournier who, having purchased a ground floor apartment in Leigh On Sea in August 2010. We are asked if we could approximate the price would likely be to prolong the lease by an additional years. Comparative residencies in Leigh On Sea with 100 year plus lease were in the region of £210,600. The average ground rent payable was £45 collected per annum. The lease expired in 2088. Considering the 62 years outstanding we calculated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 not including legals.
Last month we were contacted by Mr Jack Scott , who bought a basement apartment in Leigh On Sea in August 2000. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Identical residencies in Leigh On Sea with 100 year plus lease were valued around £260,000. The average ground rent payable was £50 billed every twelve months. The lease came to a finish on 21 March 2099. Having 73 years remaining we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of expenses.