It’s an underpublicised certainty that a Pagham 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 early years due to the loss of value being disguised by increases in the Pagham property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining falls under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Pagham will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
It is generally considered that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the residence 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Pagham 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 conveyancing solicitor we work with provide it.
Following protracted discussions with the freeholder of her one bedroom flat in Pagham, Amber commenced the lease extension process just as her lease was nearing the crucial 80-year threshold. The legal work was concluded in November 2008. The landlord’s fees were kept to an absolute minimum.
In 2009 we were phoned by Mr and Mrs. F André who, having purchased a garden flat in Pagham in January 1997. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Comparable homes in Pagham with 100 year plus lease were valued about £208,200. The mid-range ground rent payable was £65 collected every twelve months. The lease terminated in 2087. Given that there were 61 years outstanding we approximated the premium to the landlord to extend the lease to be between £20,000 and £23,000 plus costs.
In 2014 we were contacted by Dr Jasper Michel who, having took over the lease of a purpose-built flat in Pagham in September 2006. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Comparative properties in Pagham with 100 year plus lease were in the region of £260,000. The average amount of ground rent was £50 billed quarterly. The lease expired in 2098. Having 72 years outstanding we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of legals.