When it comes to domestic leasehold premises in Lynmouth, you are actually purchasing an entitlement to reside in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater especially when there are fewer than eighty years left. Leasehold owners in Lynmouth with a lease approaching 81 years left should seriously think of extending it without delay. Once the lease term has less than 80 years left, under the relevant Act the landlord is entitled to calculate and charge a larger amount, assessed on a technical multiplication, strangely termed as “marriage value” which is payable.
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before 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. |
Using our service gives you better control over the value of your Lynmouth leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Isaac was the the leasehold proprietor of a 2 bedroom apartment in Lynmouth on the market with a lease of a few days over 59 years left. Isaac on an informal basis approached his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Isaac to exercise his statutory right. Isaac obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the flat.
In 2012 we were contacted by Ms M Garcia who, having completed a first floor flat in Lynmouth in June 2010. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by a further 90 years. Comparative properties in Lynmouth with 100 year plus lease were valued around £256,600. The mid-range ground rent payable was £60 invoiced monthly. The lease came to a finish in 2077. Given that there were 52 years unexpired we calculated the premium to the landlord to extend the lease to be within £39,000 and £45,000 exclusive of fees.
Mrs Lucy Vincent bought a first floor flat in Lynmouth in June 2000. We are asked if we could estimate the price would be for a ninety year lease extension. Comparative homes in Lynmouth with an extended lease were valued about £218,000. The average ground rent payable was £45 billed monthly. The lease came to a finish on 25 March 2088. Taking into account 63 years remaining we calculated the compensation to the landlord for the lease extension to be between £17,100 and £19,800 not including fees.