The re-sale value of a leasehold property in Portsmouth depends on how long the lease has left to run. If it is close to or fewer than eighty years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension prior to buying. It is ideal to start the lease extension process when the lease still has 82 years remaining so that a lease extension can be addressed ahead of the 80 year mark. Current legislation enables Portsmouth qualifying lessees to acquire a lease extension of ninety years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Portsmouth with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| 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 |
Using our service will provide you enhanced control over the value of your Portsmouth 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 have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy negotiations with the freeholder of her one bedroom flat in Portsmouth, Tia initiated the lease extension process just as the lease was approaching the all-important 80-year deadline. The transaction was finalised in February 2010. The landlord’s fees were kept to an absolute minimum.
Ms Jennifer Campbell took over the lease of a purpose-built flat in Portsmouth in January 2003. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Identical homes in Portsmouth with an extended lease were in the region of £270,000. The average ground rent payable was £55 billed per annum. The lease terminated on 13 October 2101. Considering the 75 years remaining we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus expenses.
In 2012 we were e-mailed by Mrs Mollie Kelly who, having purchased a purpose-built flat in Portsmouth in October 2004. The question was if we could approximate the premium would likely be to prolong the lease by 90 years. Identical properties in Portsmouth with a long lease were in the region of £168,800. The average amount of ground rent was £60 billed quarterly. The lease termination date was on 20 January 2081. Having 55 years left we approximated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of expenses.