The market value of a leasehold property in Mersea Island depends on how long the lease has left to run. If it is close to or less than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended before buying. It is preferable to start the process of extending the lease is when the lease still has 82 years remaining so that a lease extension can be finalised in advance of the eighty year mark. Current legislation entitles Mersea Island qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus an additional term of 90 years. The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Mersea Island with more than 100 years left 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 circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you increased control over the value of your Mersea Island leasehold, as your property will be more valuable and saleable in terms 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.
Following protracted negotiations with the landlord of her leasehold flat in Mersea Island, Freya started the lease extension process just as the lease was nearing the crucial eighty-year mark. The legal work was finalised in November 2006. The landlord’s fees were kept to an absolute minimum.
Mr and Mrs. H Moore moved into a one bedroom flat in Mersea Island in February 2006. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by a further 90 years. Comparable flats in Mersea Island with an extended lease were valued about £265,000. The average ground rent payable was £50 invoiced annually. The lease finished on 1 September 2099. Taking into account 73 years unexpired we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus costs.
In 2013 we were contacted by Mr Teddy Simon who, having was assigned a lease of a ground floor flat in Mersea Island in November 2003. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Comparable properties in Mersea Island with 100 year plus lease were valued around £264,000. The mid-range amount of ground rent was £60 invoiced per annum. The lease elapsed on 28 June 2079. Taking into account 53 years remaining we calculated the compensation to the freeholder to extend the lease to be between £37,100 and £42,800 plus costs.