It’s an underpublicised certainty that a Charmouth residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Charmouth property market.Once your lease nears 85ish years, you should start thinking about 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 dips under 80 years - otherwise a higher premium will be payable. The majority of flat owners in Charmouth will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Charmouth,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Charmouth valuers.
Last October Riley, started to get close to the 80-year mark with the lease on his first floor apartment in Charmouth. In buying his property 19 years ago, the unexpired term was of no importance. Luckily, it dawned on him that he would imminently be paying way over the odds for Extending the lease. Riley arranged for a lease extension just under the wire last May. Riley and the freeholder eventually settled on a premium of £5,000 . If he had missed the deadline, the premium would have gone up by at least £875.
In 2013 we were called by Mr D Hall who, having acquired a purpose-built flat in Charmouth in February 2007. The dilemma was if we could approximate the premium would be for a ninety year extension to my lease. Identical premises in Charmouth with 100 year plus lease were worth £300,000. The average amount of ground rent was £50 invoiced quarterly. The lease terminated on 21 November 2102. Having 76 years left we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including professional charges.
Ms T Watson bought a one bedroom apartment in Charmouth in April 1997. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Identical premises in Charmouth with a long lease were worth £257,800. The mid-range ground rent payable was £65 billed annually. The lease expired on 8 May 2091. Having 65 years left we approximated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 plus expenses.