It’s an underpublicised truth that a Exmouth residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Exmouth property market.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term drops below 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 Most leasehold owners in Exmouth will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some cases you may not be entitled. 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 property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you better control over the value of your Exmouth leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Jason, started to get close to the 80-year threshold with the lease on his studio flat in Exmouth. Having purchased his property 18 years previously, the unexpired term was of minimal bearing. Luckily, he became aware that he needed to take steps soon on Extending the lease. Jason was able to extend his lease at the eleventh hour last June. Jason and the landlord subsequently agreed on the final figure of £5,000 . If the lease had descended to less than eighty years, the amount would have escalated by at least £850.
Last month we were e-mailed by Mrs Molly Scott , who moved into a purpose-built flat in Exmouth in March 2004. The question was if we could approximate the premium could be to extend the lease by ninety years. Similar residencies in Exmouth with a long lease were valued around £250,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease elapsed on 21 July 2095. Taking into account 69 years outstanding we estimated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.
Last August we were approach by Mr and Mrs. D Moreau , who took over the lease of a one bedroom flat in Exmouth in March 2011. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparative flats in Exmouth with 100 year plus lease were valued around £285,000. The mid-range ground rent payable was £55 collected annually. The lease lapsed on 11 November 2106. Taking into account 80 years remaining we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including fees.