It’s a harsh certainty that a Pagham residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Pagham property market.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Pagham will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the process.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the residence will be worth the same as a freehold for decades to come.
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service will provide you increased control over the value of your Pagham leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to protracted discussions with the freeholder of her leasehold apartment in Pagham, Ella initiated the lease extension process just as the lease was coming close to the crucial eighty-year mark. The lease extension was concluded in June 2006. The freeholder’s charges were kept to an absolute minimum.
Last Summer we were e-mailed by Mr Thomas Watson , who took over the lease of a one bedroom apartment in Pagham in September 2007. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Identical properties in Pagham with an extended lease were in the region of £265,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease terminated on 21 July 2098. Having 73 years unexpired we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus legals.
In 2009 we were contacted by Dr Oscar Robinson who, having purchased a one bedroom apartment in Pagham in January 2004. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable residencies in Pagham with 100 year plus lease were valued about £264,000. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease expired on 11 March 2078. Taking into account 53 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £37,100 and £42,800 exclusive of fees.