It’s an underpublicised truth that a Lewes residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Lewes property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining slips under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Lewes will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some situations you may not be entitled. 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 conveyancer throughout the formalities.
Leasehold residencies in Lewes with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Engaging our service will provide you increased control over the value of your Lewes leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Cameron, started to get close to the 80-year threshold with the lease on his ground floor apartment in Lewes. In buying his flat 18 years ago, the lease term was of no relevance. As luck would have it, he became aware that he needed to take action soon on a lease extension. Cameron was able to extend his lease just ahead of time last June. Cameron and the freeholder eventually agreed on a premium of £5,000 . If he failed to meet the deadline, the premium would have increased by at least £975.
In 2010 we were contacted by Mr and Mrs. K Michel who, having purchased a one bedroom apartment in Lewes in November 2008. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Similar residencies in Lewes with an extended lease were in the region of £200,800. The average amount of ground rent was £65 invoiced yearly. The lease ran out on 9 February 2086. Having 60 years as a residual term we calculated the premium to the landlord to extend the lease to be within £20,900 and £24,200 not including legals.
Dr Michael Jackson purchased a one bedroom flat in Lewes in October 2001. The question was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative flats in Lewes with an extended lease were valued around £260,000. The mid-range ground rent payable was £50 collected every twelve months. The lease expired on 15 March 2097. Having 71 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.