It’s an underpublicised truth 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 taken for granted in the early years due to the deflation being disguised by increases in the Highcliffe property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term slips under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of 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 clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Highcliffe,the lease extension solicitors that we work with will always be willing 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.
Two years ago Freddie, came critically close to the eighty-year mark with the lease on his purpose- built flat in Highcliffe. In buying his home two decades ago, the length of the lease was of little relevance. by good luck, he became aware that he would soon be paying an escalated premium for Extending the lease. Freddie extended the lease just under the wire in September. Freddie and the landlord ultimately settled on sum of £6,000 . If the lease had fallen to less than eighty years, the amount would have escalated by a minimum £1,100.
Mr J Davies bought a studio flat in Highcliffe in January 1996. We are asked if we could approximate the price would likely be to prolong the lease by 90 years. Similar premises in Highcliffe with 100 year plus lease were in the region of £218,000. The mid-range amount of ground rent was £45 invoiced monthly. The lease end date was on 18 November 2089. Taking into account 63 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 plus professional charges.
In 2010 we were contacted by Mr and Mrs. U Lewis who, having was assigned a lease of a studio apartment in Highcliffe in October 2004. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Similar flats in Highcliffe with an extended lease were in the region of £270,000. The average amount of ground rent was £55 collected per annum. The lease ran out in 2100. Given that there were 74 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.