On the balance of probabilities if you own a flat in Southampton you actually own a long leasehold interest over your property
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancers that we work with handle Southampton 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 conveyancing solicitor we work with provide it.
Last Winter Aaron, came seriously close to the 80-year mark with the lease on his ground floor apartment in Southampton. Having purchased his property 18 years ago, the lease term was of little interest. Fortunately, he noticed he needed to take action soon on a lease extension. Aaron was able to extend his lease at the eleventh hour last August. Aaron and the landlord ultimately agreed on the final figure of £6,000 . If he had missed the deadline, the price would have become more costly by at least £950.
Last Autumn we were phoned by Mr C Nguyen , who owned a recently refurbished apartment in Southampton in July 2002. The question was if we could approximate the price would be to extend the lease by 90 years. Comparative residencies in Southampton with 100 year plus lease were valued about £280,000. The average ground rent payable was £55 invoiced annually. The lease came to a finish in 2103. Taking into account 78 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 not including legals.
In 2014 we were contacted by Mr J Howard who, having took over the lease of a basement flat in Southampton in May 2006. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by a further 90 years. Comparable premises in Southampton with 100 year plus lease were in the region of £186,000. The average ground rent payable was £65 invoiced quarterly. The lease came to a finish on 10 November 2083. Considering the 58 years left we calculated the premium to the landlord for the lease extension to be between £24,700 and £28,600 plus costs.