Unfortunately that a Exmouth residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Exmouth property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most flat owners in Exmouth will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some situations you may not qualify. 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 for the duration of the process.
It is generally accepted that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
The lawyers that we work with handle Exmouth 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.
Leo owned a high value flat in Exmouth on the market with a lease of fraction over 61 years remaining. Leo on an informal basis approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Leo to exercise his statutory right. Leo procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
In 2014 we were called by Mr Teddy Laurent who, having acquired a newly refurbished flat in Exmouth in October 2005. The dilemma was if we could estimate the price would likely be to prolong the lease by an additional years. Comparable premises in Exmouth with a long lease were worth £242,600. The mid-range ground rent payable was £45 collected every twelve months. The lease ended on 2 July 2093. Considering the 67 years unexpired we estimated the premium to the landlord for the lease extension to be within £11,400 and £13,200 exclusive of fees.
In 2014 we were e-mailed by Ms O Green who, having bought a purpose-built apartment in Exmouth in March 1998. The dilemma was if we could approximate the premium would be to prolong the lease by a further 90 years. Identical premises in Exmouth with 100 year plus lease were valued about £280,000. The mid-range amount of ground rent was £55 billed per annum. The lease ended in 2104. Given that there were 78 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 not including legals.