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 the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Highcliffe residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Highcliffe you must check if your lease has between 70 and 90 years left. There are compelling reasons why a Highcliffe flat owner with a lease having around eighty years unexpired should take steps to ensure that a lease extension is put in place without delay
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Godiva Mortgages | 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. |
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 conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Ibrahim was the the leasehold proprietor of a 2 bedroom flat in Highcliffe being sold with a lease of a little over 59 years unexpired. Ibrahim on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Ibrahim to invoke his statutory right. Ibrahim procured expert legal guidance and secured satisfactory deal without resorting to tribunal and ending up with a market value flat.
In 2010 we were called by Mr and Mrs. G Torres who, having moved into a studio apartment in Highcliffe in September 1997. We are asked if we could shed any light on how much (roughly) price would be for a 90 year lease extension. Identical residencies in Highcliffe with an extended lease were in the region of £200,800. The mid-range amount of ground rent was £65 collected per annum. The lease terminated in 2086. Given that there were 60 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £20,900 and £24,200 plus fees.
Last month we were called by Mr and Mrs. D Sharif , who completed a one bedroom flat in Highcliffe in August 2005. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Identical homes in Highcliffe with 100 year plus lease were worth £260,000. The average ground rent payable was £50 collected every twelve months. The lease came to a finish in 2097. Taking into account 71 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including legals.