With a domestic leasehold premises in Southsea, you effectively rent it for a certain period of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are less than eighty years remaining. Anyone in Southsea with a lease drawing near to 81 years left should seriously consider extending it as soon as possible. When the lease term has under eighty years outstanding, under the relevant Act the landlord is entitled to calculate and charge a greater premium, assessed on a technical multiplication, known as “marriage value” which is payable.
Leasehold residencies in Southsea with over 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Lease extensions in Southsea can be a difficult process. We recommend you obtain guidance from a conveyancer and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Southsea lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Half a year ago Gabriel, came seriously close to the 80-year threshold with the lease on his studio apartment in Southsea. In buying his flat two decades ago, the length of the lease was of minimal relevance. Fortunately, he realised he would imminently be paying way over the odds for Extending the lease. Gabriel arranged for a lease extension just under the wire in August. Gabriel and the freeholder via the management company eventually agreed on an amount of £5,500 . If he had missed the deadline, the sum would have escalated by a minimum £900.
Last Autumn we were e-mailed by Ms Y Moreau , who completed a one bedroom flat in Southsea in June 2006. The dilemma was if we could estimate the price would likely be to extend the lease by a further 90 years. Comparative properties in Southsea with an extended lease were worth £230,800. The average ground rent payable was £60 billed per annum. The lease ended in 2085. Given that there were 60 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £24,700 and £28,600 not including costs.
In 2010 we were phoned by Dr S Dupont who, having bought a first floor apartment in Southsea in November 2011. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable premises in Southsea with an extended lease were worth £166,800. The average amount of ground rent was £50 billed quarterly. The lease concluded in 2075. Having 50 years as a residual term we calculated the premium to the landlord to extend the lease to be between £32,300 and £37,400 exclusive of professional charges.