Highcliffe leases on residential properties are gradually losing value. Where your lease has about ninety years left, you should start considering the need for a lease extension. If lease term falls under eighty years, you will then have to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to your landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Highcliffe will mostly qualify for a lease extension; however It would be wise to check with a conveyancing solicitor to confirm if you qualify. In certain cases you may not be entitled. There are prescribed deadlines and steps to comply with once the process is initiated so it’s sensible to be guided by a conveyancer during the process.
It is generally accepted that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Highcliffe,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Highcliffe valuers.
Last year Stanley, came dangerously near to the eighty-year mark with the lease on his first floor flat in Highcliffe. In buying his home 19 years previously, the unexpired term was of minimal bearing. Thankfully, he recognised he needed to take steps soon on a lease extension. Stanley extended the lease just in the nick of time last August. Stanley and the freeholder eventually agreed on sum of £6,000 . If he had missed the deadline, the premium would have gone up by a minimum £1,100.
Last Winter we were e-mailed by Mr and Mrs. K Nelson , who purchased a basement flat in Highcliffe in March 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Comparative premises in Highcliffe with 100 year plus lease were valued about £220,400. The average amount of ground rent was £45 billed monthly. The lease finished on 3 March 2089. Given that there were 64 years left we calculated the compensation to the landlord to extend the lease to be within £15,200 and £17,600 not including professional charges.
Last Winter we were phoned by Mr and Mrs. K Martínez , who acquired a basement flat in Highcliffe in February 2007. The question was if we could shed any light on how much (approximately) price would likely be to prolong the lease by a further 90 years. Similar flats in Highcliffe with an extended lease were in the region of £270,000. The average ground rent payable was £55 collected annually. The lease concluded on 11 May 2100. Considering the 75 years remaining we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of expenses.