It’s an underpublicised truth that a Eastbourne residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Eastbourne property prices.Once your lease nears 85ish years, you should 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 slips under 80 years - otherwise a higher amount will be due. The majority of leasehold owners in Eastbourne will be able to extend under the legislation; however a lawyer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer for the duration of the process.
Leasehold premises in Eastbourne with in excess of one hundred years outstanding 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 upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
The conveyancers that we work with handle Eastbourne 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.
Following protracted discussions with the landlord of her one bedroom flat in Eastbourne, Rachael started the lease extension process just as her lease was nearing the critical eighty-year deadline. The transaction was concluded in June 2013. The freeholder’s charges were kept to an absolute minimum.
In 2011 we were phoned by Mr and Mrs. C King who, having completed a first floor apartment in Eastbourne in June 2005. The question was if we could estimate the price could be for a 90 year lease extension. Similar properties in Eastbourne with 100 year plus lease were in the region of £285,000. The average ground rent payable was £45 billed yearly. The lease end date was on 27 November 2097. Given that there were 71 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including professional charges.
In 2014 we were approached by Mr S Brooks who, having took over the lease of a one bedroom flat in Eastbourne in June 1997. The dilemma was if we could estimate the premium could be to extend the lease by a further 90 years. Similar properties in Eastbourne with a long lease were in the region of £225,800. The mid-range ground rent payable was £60 collected quarterly. The lease lapsed in 2086. Having 60 years outstanding we calculated the premium to the freeholder to extend the lease to be within £25,700 and £29,600 exclusive of fees.