The rule of thumb is, all other things holding equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Selsey can extend the lease for a further ninety years under statute. Please think carefully before delaying your Selsey lease extension. Putting off the costs today simply escalates the price you will eventually be required to pay for a lease extension.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional 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 |
|---|---|
| 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; |
| Chelsea 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Selsey lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Two years ago Benjamin, started to get near to the eighty-year mark with the lease on his two bedroom flat in Selsey. In buying his flat 19 years ago, the unexpired term was of little interest. Fortunately, he recognised he needed to take steps soon on Extending the lease. Benjamin was able to extend his lease just under the wire in January. Benjamin and the freeholder via the management company in the end agreed on an amount of £5,500 . If he had missed the deadline, the premium would have gone up by at least £975.
Last Christmas we were e-mailed by Mr and Mrs. D Clarke , who was assigned a lease of a one bedroom flat in Selsey in June 2003. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Similar flats in Selsey with an extended lease were in the region of £260,000. The mid-range ground rent payable was £50 collected annually. The lease ended in 2097. Having 72 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus legals.
In 2013 we were approached by Mr B López who, having owned a one bedroom flat in Selsey in January 2000. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Identical homes in Selsey with 100 year plus lease were worth £256,600. The average amount of ground rent was £60 billed annually. The lease ran out on 16 July 2077. Given that there were 52 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £39,000 and £45,000 exclusive of fees.