Unfortunately that a Southbourne residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Southbourne property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term falls under 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Southbourne will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
Leasehold premises in Southbourne with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
The lawyers that we work with undertake Southbourne 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.
In the wake of eight months of unsuccessful discussions with the freeholder of her leasehold apartment in Southbourne, Alisha started the lease extension process just as her lease was nearing the critical eighty-year mark. The lease extension completed in April 2007. The freeholder’s costs were kept to an absolute minimum.
Mrs Danielle Robinson bought a studio apartment in Southbourne in April 2004. We are asked if we could estimate the premium would be for a ninety year lease extension. Comparable properties in Southbourne with 100 year plus lease were valued about £183,600. The average ground rent payable was £65 billed annually. The lease terminated on 6 July 2083. Considering the 57 years remaining we calculated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 not including expenses.
In 2011 we were e-mailed by Mr and Mrs. N Rodríguez who, having bought a recently refurbished apartment in Southbourne in July 2005. The question was if we could shed any light on how much (approximately) premium would be to prolong the lease by an additional years. Similar homes in Southbourne with 100 year plus lease were in the region of £250,000. The mid-range amount of ground rent was £50 billed quarterly. The lease elapsed on 23 March 2094. Given that there were 68 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus legals.