It’s an underpublicised truth that a Pagham residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Pagham property market.Where your lease has approximately ninety years left, you should start considering a lease extension. If lease term dips under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Pagham will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Pagham,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Pagham valuers.
Half a year ago Arthur, came dangerously near to the 80-year threshold with the lease on his two bedroom flat in Pagham. Having purchased his flat two decades ago, the lease term was of minimal relevance. As luck would have it, he recognised he would soon be paying an escalated premium for Extending the lease. Arthur arranged for a lease extension just in the nick of time in May. Arthur and the landlord eventually agreed on sum of £6,000 . If the lease had slipped lower than eighty years, the premium would have gone up by at least £1,100.
Dr Luke Dupont was assigned a lease of a one bedroom apartment in Pagham in June 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by ninety years. Similar residencies in Pagham with an extended lease were valued around £280,000. The mid-range amount of ground rent was £55 collected quarterly. The lease elapsed on 15 October 2103. Taking into account 78 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of professional charges.
Ms J González owned a ground floor flat in Pagham in January 1998. The dilemma was if we could shed any light on how much (roughly) price could be to prolong the lease by ninety years. Similar flats in Pagham with 100 year plus lease were in the region of £191,000. The average ground rent payable was £65 collected monthly. The lease came to a finish on 12 October 2083. Considering the 58 years unexpired we approximated the compensation to the landlord for the lease extension to be between £23,800 and £27,400 not including costs.