On the balance of probabilities where you own a flat in New Brighton you actually own a long leasehold interest over your property
Leasehold premises in New Brighton with over 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| Bank of Scotland | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with procure New Brighton 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 conveyancer we work with provide it.
After protracted correspondence with the landlord of her ground floor flat in New Brighton, Grace commenced the lease extension process just as the lease was approaching the crucial 80-year mark. The legal work was finalised in October 2013. The freeholder’s charges were negotiated to a tad over 600 GBP.
In 2010 we were e-mailed by Dr G Hall who, having moved into a garden apartment in New Brighton in June 2002. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Comparable flats in New Brighton with a long lease were in the region of £280,000. The average ground rent payable was £55 billed quarterly. The lease ended on 2 July 2102. Taking into account 77 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus professional charges.
Last July we were contacted by Mr F Patel , who purchased a studio flat in New Brighton in June 2007. The question was if we could approximate the price would be to prolong the lease by 90 years. Comparable flats in New Brighton with a long lease were valued about £183,600. The mid-range amount of ground rent was £65 billed every twelve months. The lease terminated on 9 August 2082. Taking into account 57 years remaining we approximated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 plus costs.