The market value of Little Hampton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate materialy once the unexpired lease term is less than 80 years
It is generally accepted that a property with more than one hundred years unexpired lease term 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 in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Little Hampton 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.
Aaron was the the leasehold proprietor of a 2 bedroom apartment in Little Hampton on the market with a lease of a few days over fifty eight years unexpired. Aaron on an informal basis approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Aaron to exercise his statutory right. Aaron procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Mr and Mrs. W François moved into a ground floor flat in Little Hampton in February 1997. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Identical residencies in Little Hampton with 100 year plus lease were valued around £270,000. The mid-range ground rent payable was £55 invoiced quarterly. The lease expired on 11 March 2101. Given that there were 75 years left we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.
Last October we were contacted by Dr G Anderson , who completed a purpose-built apartment in Little Hampton in November 1996. The dilemma was if we could estimate the premium would likely be to prolong the lease by an additional years. Similar properties in Little Hampton with a long lease were in the region of £168,800. The average amount of ground rent was £60 invoiced monthly. The lease ran out on 1 September 2081. Considering the 55 years unexpired we approximated the compensation to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of professional charges.