Unfortunately that a Highcliffe residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Highcliffe property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If the number of years remaining falls under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Highcliffe will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Yorkshire 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. |
The lawyers that we work with undertake Highcliffe 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 conveyancer we work with provide it.
Alex was the the leasehold owner of a high value apartment in Highcliffe on the market with a lease of just over fifty eight years unexpired. Alex on an informal basis spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Alex to exercise his statutory right. Alex procured expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
Last August we were contacted by Mr and Mrs. O Roux , who was assigned a lease of a ground floor apartment in Highcliffe in February 1997. We are asked if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Identical residencies in Highcliffe with an extended lease were in the region of £275,000. The mid-range ground rent payable was £55 invoiced monthly. The lease terminated in 2103. Taking into account 77 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus fees.
Last Summer we were e-mailed by Mr and Mrs. L Green , who acquired a first floor flat in Highcliffe in March 2008. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Identical residencies in Highcliffe with a long lease were in the region of £181,200. The mid-range amount of ground rent was £65 billed annually. The lease lapsed on 28 March 2082. Given that there were 56 years unexpired we approximated the premium to the freeholder to extend the lease to be between £29,500 and £34,000 not including legals.