When it comes to long leasehold property in Leigh On Sea, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are fewer than 80 years left. Leasehold owners in Leigh On Sea with a lease drawing near to 81 years unexpired should seriously consider extending it sooner as opposed to later. Once a lease has below 80 years remaining, under the current legislation the freeholder can calculate and levy a greater amount, assessed on a technical computation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Leigh On Sea 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.
Logan was the the leasehold proprietor of a 2 bedroom flat in Leigh On Sea on the market with a lease of just over 72 years left. Logan on an informal basis contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Logan to exercise his statutory right. Logan procured expert advice and was able to make a more informed decision and deal with the matter and sell the property.
In 2014 we were approached by Mr and Mrs. H Ward who, having owned a purpose-built flat in Leigh On Sea in August 1995. We are asked if we could estimate the premium could be for a 90 year lease extension. Identical residencies in Leigh On Sea with an extended lease were valued around £250,000. The average amount of ground rent was £50 billed every twelve months. The lease ended on 12 July 2096. Taking into account 70 years remaining we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including costs.
In 2013 we were approached by Mr and Mrs. C Davis who, having moved into a first floor flat in Leigh On Sea in August 2010. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparable flats in Leigh On Sea with an extended lease were valued around £246,800. The average ground rent payable was £60 collected every twelve months. The lease expired on 10 October 2076. Considering the 50 years left we estimated the premium to the freeholder for the lease extension to be between £44,700 and £51,600 exclusive of fees.