Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a set period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Beaminster. Clearly, the length of lease remaining reduces over time. This is often overlooked and only becomes a problem when the property has to be sold or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease. Qualifying long lease owners in Beaminster have the legal entitlement to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Do give careful deliberation before delaying your Beaminster lease extension. Holding off that expense now simply increases the price you will eventually have to pay to extend your lease
Leasehold properties in Beaminster with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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 |
Using our service will provide you better control over the value of your Beaminster leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Toby owned a conversion apartment in Beaminster being sold with a lease of just over 72 years outstanding. Toby on an informal basis contacted his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Toby to exercise his statutory right. Toby obtained expert advice and secured satisfactory resolution without resorting to tribunal and sell the property.
In 2011 we were phoned by Mr and Mrs. Y Cox who, having purchased a first floor apartment in Beaminster in August 2007. The dilemma was if we could shed any light on how much (roughly) premium could be to prolong the lease by ninety years. Comparable flats in Beaminster with 100 year plus lease were valued about £210,600. The average ground rent payable was £45 billed yearly. The lease lapsed in 2087. Given that there were 62 years outstanding we approximated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of expenses.
Dr Eliot Wood bought a purpose-built flat in Beaminster in July 2007. We are asked if we could estimate the price could be for a ninety year extension to my lease. Similar properties in Beaminster with an extended lease were valued about £265,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease expired in 2098. Given that there were 73 years remaining we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.