Worthing leases on residential deteriorating in value. Where your lease has in the region of 90 years remaining, you should start thinking about a lease extension. An important point to note is that it is desirable for a lease extension to take place before the term of the current lease drops under eighty years - otherwise a higher premium will be payable. Flat owners in Worthing will usually qualify for a lease extension; however a solicitor will confirm your eligibility. In some circumstances you may not qualify. There are also strict timetables and formalities to follow once the process has started so it’s sensible to be guided by a lawyer during the process.
Leasehold properties in Worthing with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 lawyers that we work with handle Worthing 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.
Off the back of protracted correspondence with the landlord of her garden flat in Worthing, Phoebe started the lease extension process just as her lease was coming close to the all-important eighty-year mark. The legal work was concluded in June 2009. The landlord’s costs were restricted to under 500 pounds.
In 2013 we were approached by Mrs Francesca King who, having bought a first floor apartment in Worthing in October 2011. The question was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparable premises in Worthing with 100 year plus lease were valued about £166,800. The average ground rent payable was £50 invoiced per annum. The lease terminated in 2076. Considering the 50 years outstanding we calculated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 not including fees.
Mr T Clarke moved into a ground floor flat in Worthing in June 2001. The dilemma was if we could estimate the premium could be for a 90 year extension to my lease. Similar properties in Worthing with a long lease were valued around £280,000. The mid-range amount of ground rent was £45 billed annually. The lease expired on 19 July 2096. Taking into account 70 years outstanding we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of professional charges.