Southsea leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Southsea enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Southsea you really ought to investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Southsea,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Southsea valuers.
Matthew owned a 2 bedroom flat in Southsea on the market with a lease of fraction over 61 years left. Matthew on an informal basis approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Matthew to invoke his statutory right. Matthew obtained expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
In 2010 we were called by Mr and Mrs. H Bennett who, having was assigned a lease of a first floor flat in Southsea in September 2009. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar residencies in Southsea with a long lease were valued about £174,200. The mid-range amount of ground rent was £55 collected yearly. The lease concluded in 2077. Considering the 51 years remaining we calculated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 not including expenses.
Mrs N James was assigned a lease of a ground floor flat in Southsea in March 2008. The question was if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Similar homes in Southsea with an extended lease were in the region of £280,000. The average ground rent payable was £45 billed yearly. The lease finished in 2097. Considering the 71 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus legals.