Chances are that where you own a flat in Pevensey you actually own a long leasehold interest over your property
Leasehold residencies in Pevensey with over 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Using our service will provide you enhanced control over the value of your Pevensey leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Michael was the the leasehold owner of a studio flat in Pevensey being sold with a lease of a little over 59 years outstanding. Michael on an informal basis approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Michael to exercise his statutory right. Michael obtained expert legal guidance and secured satisfactory resolution informally and sell the flat.
In 2009 we were phoned by Mrs N Smith who, having bought a one bedroom flat in Pevensey in March 2008. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Similar residencies in Pevensey with an extended lease were worth £280,000. The average amount of ground rent was £55 collected per annum. The lease ended in 2103. Taking into account 78 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of professional charges.
Last month we were contacted by Mrs Alice Wilson , who owned a garden flat in Pevensey in September 2001. The question was if we could approximate the price would be for a 90 year lease extension. Similar flats in Pevensey with 100 year plus lease were in the region of £191,000. The average ground rent payable was £65 invoiced yearly. The lease elapsed in 2083. Taking into account 58 years remaining we estimated the compensation to the freeholder to extend the lease to be between £23,800 and £27,400 not including costs.