Unfortunately that a Beaworthy residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Beaworthy property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term slips under 80 years, you will then be required to pay 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 Beaworthy will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold properties in Beaworthy with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Beaworthy 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.
During the course of the last few months Teddy, came dangerously close to the 80-year mark with the lease on his two bedroom apartment in Beaworthy. In buying his home two decades ago, the unexpired term was of little concern. Thankfully, he realised he would imminently be paying an inflated amount for a lease extension. Teddy was able to extend his lease just in the nick of time last September. Teddy and the freeholder ultimately settled on an amount of £5,500 . If the lease had dropped to less than eighty years, the price would have increased by a minimum £1,025.
Last Christmas we were phoned by Dr Robyn Sharif , who was assigned a lease of a purpose-built flat in Beaworthy in January 1997. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Identical homes in Beaworthy with a long lease were in the region of £246,800. The average amount of ground rent was £60 invoiced annually. The lease expiry date was on 6 July 2075. Having 50 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £44,700 and £51,600 plus professional charges.
Dr John Gray moved into a one bedroom apartment in Beaworthy in June 1998. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Identical homes in Beaworthy with 100 year plus lease were valued around £208,200. The mid-range ground rent payable was £65 invoiced quarterly. The lease elapsed on 16 July 2086. Having 61 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £20,000 and £23,000 not including professional charges.