Unfortunately that a Southport 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 first few years due to the loss of value being disguised by increases in the Southport property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term falls below 80 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 leasehold owners in Southport will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold premises in Southport with over 100 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 home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The lawyers that we work with undertake Southport 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 lawyer we work with provide it.
Trailing protracted discussions with the freeholder of her purpose-built flat in Southport, Isobel started the lease extension process as the eighty year mark was swiftly advancing. The legal work was finalised in May 2015. The freeholder’s costs were negotiated to below 450 pounds.
Dr J Khan purchased a studio flat in Southport in April 1997. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by ninety years. Similar flats in Southport with a long lease were worth £280,000. The average ground rent payable was £45 invoiced monthly. The lease terminated in 2094. Taking into account 69 years outstanding we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 plus expenses.
In 2012 we were approached by Mr and Mrs. T García who, having acquired a garden apartment in Southport in April 2000. We are asked if we could estimate the price would likely be for a ninety year lease extension. Comparable premises in Southport with 100 year plus lease were in the region of £216,000. The average amount of ground rent was £60 billed annually. The lease ran out in 2083. Taking into account 58 years remaining we calculated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of expenses.