Unfortunately that a Pevensey residential lease is a wasting asset. The lease value drops 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 Pevensey property market.Where your lease has approximately ninety 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 below 80 years - otherwise a higher premium will be payable. The majority of flat owners in Pevensey will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Pevensey,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Pevensey valuers.
Last Spring Harrison, started to get near to the 80-year mark with the lease on his studio flat in Pevensey. Having purchased his property 18 years ago, the unexpired term was of no bearing. Thankfully, he noticed he needed to take steps soon on a lease extension. Harrison extended the lease at the eleventh hour in July. Harrison and the freeholder via the management company eventually settled on sum of £5,000 . If the lease had slipped below eighty years, the figure would have escalated by a minimum £1,025.
Last Winter we were approach by Dr D Murphy , who was assigned a lease of a basement flat in Pevensey in June 1996. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Similar premises in Pevensey with a long lease were in the region of £290,000. The average ground rent payable was £60 billed quarterly. The lease finished in 2106. Considering the 80 years unexpired we calculated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including expenses.
In 2011 we were phoned by Mr and Mrs. E King who, having purchased a studio apartment in Pevensey in October 2011. We are asked if we could approximate the premium could be to extend the lease by ninety years. Similar homes in Pevensey with an extended lease were worth £200,800. The mid-range ground rent payable was £65 invoiced annually. The lease concluded in 2086. Considering the 60 years remaining we estimated the compensation to the landlord for the lease extension to be within £20,900 and £24,200 plus legals.