Pevensey leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Pevensey residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Pevensey you would be well advised to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Pevensey leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago Nathaniel, came perilously near to the eighty-year mark with the lease on his leasehold flat in Pevensey. In buying his home 18 years previously, the length of the lease was of little bearing. As luck would have it, he realised he needed to take steps soon on a lease extension. Nathaniel arranged for a lease extension at the eleventh hour in April. Nathaniel and the freeholder in the end agreed on an amount of £5,000 . If he had missed the deadline, the amount would have increased by a minimum £975.
Last Spring we were contacted by Ms Danielle White , who moved into a purpose-built flat in Pevensey in September 1997. The question was if we could approximate the premium would be for a 90 year lease extension. Identical flats in Pevensey with 100 year plus lease were valued about £200,800. The average ground rent payable was £65 collected per annum. The lease end date was on 17 August 2085. Having 60 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £20,900 and £24,200 plus fees.
In 2009 we were e-mailed by Dr F Young who, having owned a basement flat in Pevensey in March 2006. We are asked if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Comparative premises in Pevensey with 100 year plus lease were in the region of £260,000. The mid-range ground rent payable was £50 collected quarterly. The lease end date was in 2096. Considering the 71 years remaining we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including legals.