The value of Southport leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the remaining term is less than eighty years
Leasehold premises in Southport with more than 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you increased control over the value of your Southport leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy negotiations with the landlord of her purpose-built flat in Southport, Lily started the lease extension process just as her lease was nearing the all-important 80-year deadline. The lease extension completed in February 2009. The landlord’s fees were restricted to under 500 GBP.
In 2011 we were e-mailed by Mr Archie Gray who, having owned a purpose-built apartment in Southport in September 2009. The question was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Similar flats in Southport with 100 year plus lease were in the region of £179,200. The average amount of ground rent was £55 collected yearly. The lease expired on 25 June 2076. Considering the 51 years remaining we estimated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of expenses.
Last Winter we were contacted by Dr Lewis Bertrand , who purchased a basement apartment in Southport in October 2005. The dilemma was if we could approximate the price would be for a 90 year lease extension. Comparable homes in Southport with an extended lease were worth £285,000. The mid-range amount of ground rent was £45 collected quarterly. The lease ran out in 2096. Taking into account 71 years outstanding we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of fees.