There is no doubt about it a leasehold flat or house in Southport is a wasting asset as a result of the shortening lease. If the residual term has, beyond 99 years remaining then this decrease may be fractional nevertheless there will become a stage when a lease has fewer than eighty years left as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the primary logic behind why you should extend the lease without delay. Many flat owners in Southport will qualify for this right; that being said a lawyer can advise if you qualify to extend your lease. In certain situations you may not qualify, the most common reason being that you have owned the property for under two years.
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 ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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 conveyancing solicitors that we work with handle Southport 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.
During the course of the last few months Aaron, came critically close to the 80-year mark with the lease on his first floor apartment in Southport. In buying his property two decades ago, the lease term was of minimal importance. Luckily, he noticed he needed to take action soon on Extending the lease. Aaron extended the lease just under the wire in June. Aaron and the landlord who owned the flat above subsequently agreed on sum of £5,000 . If he not met the deadline, the premium would have gone up by at least £1,150.
Mr and Mrs. P Morel acquired a first floor flat in Southport in June 2003. The question was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar residencies in Southport with an extended lease were valued about £300,000. The average ground rent payable was £50 collected quarterly. The lease ran out on 12 November 2100. Having 75 years remaining we estimated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus fees.
Mr and Mrs. H André completed a ground floor flat in Southport in June 2001. The question was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Identical premises in Southport with an extended lease were in the region of £252,800. The average amount of ground rent was £65 billed per annum. The lease ran out on 16 January 2090. Taking into account 65 years left we approximated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of professional charges.