Portslade leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Portslade residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Portslade you would be well advised to see if your lease has between 70 and 90 years remaining. There are good reasons why a Portslade flat owner with a lease having around 80 years remaining should take action to make sure that a lease extension is put in place without delay
Leasehold premises in Portslade with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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; |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Portslade,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 Portslade valuers.
Connor was the the leasehold proprietor of a conversion flat in Portslade being sold with a lease of fraction over fifty eight years left. Connor informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 annually. No ground rent would be payable on a lease extension were Connor to exercise his statutory right. Connor obtained expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Last Autumn we were contacted by Mrs R Rivera , who completed a ground floor apartment in Portslade in August 2012. We are asked if we could estimate the premium would likely be to prolong the lease by 90 years. Similar properties in Portslade with an extended lease were in the region of £181,600. The mid-range amount of ground rent was £55 invoiced per annum. The lease termination date was in 2077. Considering the 52 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 plus costs.
In 2010 we were contacted by Ms Maisie Rodríguez who, having acquired a purpose-built flat in Portslade in April 2000. We are asked if we could approximate the premium could be to extend the lease by a further 90 years. Similar properties in Portslade with 100 year plus lease were valued about £285,000. The mid-range amount of ground rent was £45 billed annually. The lease concluded in 2097. Having 72 years left we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of fees.