Unfortunately that a Beaworthy residential lease is a wasting 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 loss of value being disguised by increases in the Beaworthy property market.Once your lease nears 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be payable. The majority of flat owners in Beaworthy will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some cases you may not qualify. 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 conveyancing solicitor throughout the formalities.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Engaging our service gives you increased control over the value of your Beaworthy leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Gabriel, started to get close to the 80-year threshold with the lease on his first floor apartment in Beaworthy. Having bought his property two decades ago, the lease term was of little bearing. Fortunately, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Gabriel was able to extend his lease at the eleventh hour last April. Gabriel and the freeholder via the management company ultimately settled on an amount of £5,000 . If the lease had dipped lower than eighty years, the sum would have gone up by a minimum £950.
Last month we were phoned by Ms Melissa Jones , who acquired a basement flat in Beaworthy in March 1996. The question was if we could estimate the premium would likely be to extend the lease by an additional years. Comparative flats in Beaworthy with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £55 collected every twelve months. The lease terminated in 2105. Given that there were 79 years left we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 plus legals.
Last Summer we were e-mailed by Mr Daniel Sharif , who acquired a first floor flat in Beaworthy in August 2002. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Comparative properties in Beaworthy with a long lease were in the region of £193,400. The mid-range ground rent payable was £65 invoiced yearly. The lease elapsed on 3 February 2085. Considering the 59 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 exclusive of costs.