It’s a harsh truth that a St Leonards On Sea residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the St Leonards On Sea property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher premium will be payable. Most flat owners in St Leonards On Sea will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
Leasehold properties in St Leonards On Sea with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
Retaining our service will provide you better control over the value of your St Leonards On Sea leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Nathaniel, started to get near to the 80-year mark with the lease on his basement flat in St Leonards On Sea. In buying his home 18 years previously, the unexpired term was of little relevance. As luck would have it, it dawned on him that he needed to take steps soon on a lease extension. Nathaniel extended the lease at the eleventh hour in March. Nathaniel and the freeholder in the end agreed on a premium of £5,500 . If he had missed the deadline, the amount would have escalated by a minimum £1,050.
In 2012 we were called by Dr Matthew Gray who, having acquired a one bedroom apartment in St Leonards On Sea in September 2004. The question was if we could approximate the price would likely be to prolong the lease by 90 years. Identical properties in St Leonards On Sea with 100 year plus lease were in the region of £280,000. The average ground rent payable was £55 invoiced every twelve months. The lease expired on 1 October 2104. Considering the 78 years left we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 not including professional charges.
Mr and Mrs. V Brooks moved into a garden flat in St Leonards On Sea in November 2012. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Similar flats in St Leonards On Sea with a long lease were worth £186,000. The average ground rent payable was £65 billed quarterly. The lease ran out in 2084. Considering the 58 years unexpired we approximated the compensation to the landlord for the lease extension to be within £24,700 and £28,600 exclusive of costs.