The market value of a leasehold property in Charmouth is impacted by how long the lease has remaining. If it is near to or less than 80 years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended before purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years unexpired so that a lease extension can be concluded ahead of the 80 year mark. Leasehold Reform legislation entitles Charmouth qualifying lessees to an additional term of 90 years over and above the unexpired term, at a peppercorn rent (zero ground rent). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure Charmouth 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.
Joseph owned a studio flat in Charmouth on the market with a lease of a little over fifty eight years outstanding. Joseph informally contacted his landlord a well known London-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Joseph to invoke his statutory right. Joseph procured expert advice and secured an acceptable deal without going to tribunal and ending up with a market value flat.
Last year we were contacted by Dr Amy Brown , who acquired a recently refurbished apartment in Charmouth in October 1996. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative properties in Charmouth with a long lease were worth £300,000. The average amount of ground rent was £50 collected annually. The lease came to a finish in 2101. Having 75 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus costs.
In 2012 we were called by Mrs Jessica Lefèvre who, having moved into a garden apartment in Charmouth in April 2008. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Similar premises in Charmouth with an extended lease were worth £250,400. The mid-range amount of ground rent was £65 invoiced monthly. The lease lapsed on 22 February 2090. Taking into account 64 years remaining we approximated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 exclusive of fees.