Highcliffe leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Highcliffe tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Highcliffe you would be well advised to see if your lease has between seventy and ninety years left. There are good reasons why a Highcliffe flat owner with a lease having around 80 years left should take action to make sure that a lease extension is effected without delay
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you enhanced control over the value of your Highcliffe leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to unsuccessful discussions with the landlord of her two bedroom apartment in Highcliffe, Kayleigh started the lease extension process just as her lease was nearing the all-important eighty-year threshold. The lease extension was finalised in July 2009. The landlord’s costs were kept to an absolute minimum.
Last month we were approach by Mr and Mrs. U Wright , who purchased a first floor apartment in Highcliffe in March 2007. The dilemma was if we could shed any light on how much (roughly) price would likely be to prolong the lease by an additional years. Identical properties in Highcliffe with a long lease were worth £227,800. The mid-range ground rent payable was £45 collected quarterly. The lease finished in 2090. Taking into account 65 years unexpired we estimated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 plus expenses.
Last year we were called by Ms V Ward , who acquired a basement apartment in Highcliffe in May 1995. The dilemma was if we could approximate the premium would be to extend the lease by ninety years. Comparable flats in Highcliffe with a long lease were in the region of £270,000. The mid-range amount of ground rent was £55 billed per annum. The lease expired in 2101. Having 76 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of legals.