Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in New Brighton. Inevitably, the term of lease remaining shortens over time. This is often ignored and only becomes a problem when the flat or house needs to be sold or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension. Qualifying leaseholders in New Brighton have the legal entitlement to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. You should give due deliberation before putting off your New Brighton lease extension. Putting off the cost now simply increases the price you will eventually incur for a lease extension
Leasehold properties in New Brighton with in excess of 100 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 home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you better control over the value of your New Brighton leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Ollie, started to get near to the eighty-year threshold with the lease on his first floor apartment in New Brighton. Having purchased his flat 19 years ago, the lease term was of minimal significance. Luckily, he recognised he would soon be paying an escalated premium for Extending the lease. Ollie was able to extend his lease just under the wire in March. Ollie and the landlord subsequently agreed on sum of £5,500 . If he failed to meet the deadline, the amount would have gone up by a minimum £1,125.
Mr and Mrs. T Bailey was assigned a lease of a basement apartment in New Brighton in May 2006. The dilemma was if we could approximate the premium could be for a 90 year lease extension. Identical premises in New Brighton with a long lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced per annum. The lease finished in 2101. Taking into account 75 years unexpired we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
Ms H Davis was assigned a lease of a garden apartment in New Brighton in March 2012. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative residencies in New Brighton with 100 year plus lease were worth £173,800. The mid-range amount of ground rent was £60 billed monthly. The lease finished in 2081. Considering the 55 years outstanding we calculated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 not including professional charges.