Southsea leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Southsea enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Southsea you really ought to investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Southsea with more than one hundred years unexpired on the lease are often referred to as ‘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 reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you increased control over the value of your Southsea leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Teddy was the the leasehold owner of a 2 bedroom flat in Southsea being marketed with a lease of just over fifty eight years outstanding. Teddy on an informal basis spoke with his freeholder a well known London-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Teddy to invoke his statutory right. Teddy obtained expert advice and secured an acceptable resolution informally and readily saleable.
Mr W Taylor owned a ground floor apartment in Southsea in January 2003. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Similar residencies in Southsea with an extended lease were in the region of £260,200. The average amount of ground rent was £65 collected every twelve months. The lease elapsed in 2092. Considering the 66 years remaining we estimated the premium to the freeholder to extend the lease to be within £16,200 and £18,600 not including legals.
Mr and Mrs. P Patel purchased a studio flat in Southsea in August 2005. We are asked if we could shed any light on how much (approximately) price could be for a 90 year extension to my lease. Identical properties in Southsea with an extended lease were in the region of £198,800. The mid-range amount of ground rent was £55 billed monthly. The lease ended on 5 May 2081. Given that there were 55 years remaining we approximated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 not including professional charges.