When it comes to residential leasehold property in Mersea Island, you are actually buying an entitlement to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive particularly when there are fewer than 80 years left. Anyone in Mersea Island with a lease drawing near to 81 years left should seriously consider extending it as soon as possible. When a lease has less than 80 years left, under the relevant statute the landlord is entitled to calculate and charge a greater amount, based on a technical calculation, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Mersea Island,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Mersea Island valuers.
Trailing unsuccessful correspondence with the freeholder of her first floor apartment in Mersea Island, Natasha started the lease extension process as the 80 year mark was quickly nearing. The legal work was finalised in January 2012. The freeholder’s charges were kept to an absolute minimum.
Last Summer we were phoned by Dr Theo Collins , who purchased a one bedroom apartment in Mersea Island in October 2008. We are asked if we could estimate the price could be for a 90 year lease extension. Comparative premises in Mersea Island with an extended lease were in the region of £200,800. The mid-range amount of ground rent was £65 billed monthly. The lease terminated in 2085. Taking into account 60 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £20,900 and £24,200 exclusive of expenses.
In 2012 we were approached by Dr Oscar Thomas who, having acquired a recently refurbished flat in Mersea Island in October 2001. We are asked if we could shed any light on how much (approximately) price would likely be to extend the lease by an additional years. Identical flats in Mersea Island with 100 year plus lease were worth £255,000. The average amount of ground rent was £50 invoiced quarterly. The lease finished on 11 July 2096. Having 71 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including expenses.