St Leonards On Sea 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. Most owners of residential leasehold property in St Leonards On Sea enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in St Leonards On Sea you must check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in St Leonards On Sea with more than 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 reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with undertake St Leonards On Sea 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.
Last October Alfie, started to get close to the 80-year mark with the lease on his two bedroom apartment in St Leonards On Sea. Having purchased his home two decades ago, the length of the lease was of no significance. As luck would have it, he became aware that he would soon be paying way over the odds for Extending the lease. Alfie arranged for a lease extension just under the wire last September. Alfie and the landlord eventually agreed on sum of £5,000 . If he failed to meet the deadline, the figure would have become more costly by at least £1,100.
In 2014 we were phoned by Ms C Rose who, having acquired a recently refurbished apartment in St Leonards On Sea in September 2006. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Comparable premises in St Leonards On Sea with an extended lease were valued around £218,000. The average ground rent payable was £45 billed per annum. The lease elapsed in 2089. Taking into account 63 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £17,100 and £19,800 not including legals.
Last Christmas we were contacted by Mr T Davis , who purchased a recently refurbished apartment in St Leonards On Sea in March 1997. The question was if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Comparable premises in St Leonards On Sea with an extended lease were valued around £265,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease lapsed on 27 March 2100. Having 74 years unexpired we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including legals.