There is no doubt about it a leasehold flat or house in Southend On Sea is a wasting asset as a result of the diminishing lease term. If the lease has, more than 99 years to run then this decrease may be of little impact however there will become a point in time when a lease has less than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main logic behind why you should consider extending without delay. The majority of flat owners in Southend On Sea will meet the qualifying criteria; nevertheless a conveyancing solicitor will be able to confirm whether you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold premises in Southend On Sea with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 conveyancers that we work with handle Southend On Sea 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 conveyancing solicitor we work with provide it.
Subsequent to lengthy negotiations with the freeholder of her first floor flat in Southend On Sea, Tia started the lease extension process as the eighty year deadline was quickly coming. The legal work was finalised in January 2010. The landlord’s costs were kept to an absolute minimum.
Last Autumn we were phoned by Mrs V Hall , who completed a recently refurbished flat in Southend On Sea in June 1998. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable residencies in Southend On Sea with 100 year plus lease were valued around £252,800. The average amount of ground rent was £65 billed monthly. The lease ended in 2090. Having 65 years left we calculated the premium to the landlord to extend the lease to be between £17,100 and £19,800 not including legals.
In 2012 we were phoned by Ms Amy Green who, having moved into a ground floor flat in Southend On Sea in August 2002. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical residencies in Southend On Sea with an extended lease were valued around £191,400. The average ground rent payable was £55 invoiced monthly. The lease expired on 26 October 2079. Given that there were 54 years outstanding we approximated the premium to the landlord to extend the lease to be between £34,200 and £39,600 exclusive of legals.