Unfortunately that a Southampton residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Southampton property prices.Once your lease nears 85ish years, you need to 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 dips below eighty years - otherwise a higher premium will be due. Most flat owners in Southampton will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Southampton,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Southampton valuers.
Joseph was the the leasehold owner of a studio flat in Southampton being sold with a lease of a few days over fifty eight years outstanding. Joseph informally contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Joseph to exercise his statutory right. Joseph procured expert advice and secured an acceptable resolution without going to tribunal and readily saleable.
In 2012 we were e-mailed by Ms B Parker who, having moved into a ground floor flat in Southampton in August 2009. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Identical premises in Southampton with 100 year plus lease were valued about £166,400. The mid-range ground rent payable was £60 collected monthly. The lease end date was on 19 January 2080. Taking into account 54 years remaining we estimated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 exclusive of expenses.
Last Autumn we were contacted by Mr and Mrs. E Bonnet , who acquired a studio apartment in Southampton in August 2010. The dilemma was if we could estimate the premium would be to prolong the lease by a further 90 years. Comparable flats in Southampton with an extended lease were valued around £227,800. The mid-range amount of ground rent was £45 collected yearly. The lease lapsed in 2091. Given that there were 65 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including costs.