It’s an underpublicised certainty that a Southbourne residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Southbourne property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term falls below 80 years, you will then be required to pay half 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 extra value that a lease extension will add the property The majority of flat owners in Southbourne will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
Leasehold premises in Southbourne with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Southbourne,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Southbourne valuers.
Connor owned a conversion apartment in Southbourne on the market with a lease of a few days over 72 years left. Connor informally approached his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be payable on a lease extension were Connor to invoke his statutory right. Connor procured expert advice and secured an acceptable deal informally and sell the property.
Last Autumn we were called by Ms Mia Parker , who purchased a one bedroom apartment in Southbourne in August 2007. We are asked if we could approximate the price could be for a 90 year lease extension. Comparative homes in Southbourne with 100 year plus lease were valued about £210,600. The average ground rent payable was £45 collected monthly. The lease expired in 2087. Considering the 62 years unexpired we estimated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of costs.
In 2012 we were called by Mr and Mrs. V Pérez who, having owned a one bedroom apartment in Southbourne in October 1999. The question was if we could shed any light on how much (approximately) premium could be to extend the lease by an additional years. Identical properties in Southbourne with a long lease were valued about £265,000. The mid-range amount of ground rent was £50 billed annually. The lease came to a finish in 2098. Having 73 years outstanding we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus legals.