Lynmouth leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Lynmouth residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Lynmouth you really ought to investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Lynmouth with in excess of 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
| 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. |
The conveyancing solicitors that we work with procure Lynmouth 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.
In the wake of 9 months of protracted negotiations with the landlord of her ground floor apartment in Lynmouth, Ellie commenced the lease extension process as the 80 year threshold was rapidly coming. The legal work was concluded in June 2015. The landlord’s fees were kept to an absolute minimum.
In 2014 we were contacted by Mr and Mrs. R Smith who, having completed a ground floor flat in Lynmouth in August 1995. We are asked if we could shed any light on how much (roughly) price would be for a 90 year lease extension. Identical premises in Lynmouth with a long lease were worth £186,000. The mid-range amount of ground rent was £65 invoiced monthly. The lease concluded in 2083. Given that there were 58 years left we approximated the compensation to the freeholder to extend the lease to be within £24,700 and £28,600 plus fees.
Last Summer we were e-mailed by Mr N Michel , who owned a one bedroom apartment in Lynmouth in October 1998. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Comparative properties in Lynmouth with 100 year plus lease were valued around £250,000. The average amount of ground rent was £50 invoiced annually. The lease terminated in 2094. Given that there were 69 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including legals.