Unfortunately that a Verwood residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Verwood property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining slips under eighty 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 flat owners in Verwood will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the property will be worth the same as a freehold for many years ahead.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Verwood,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Verwood valuers.
Noah owned a high value apartment in Verwood on the market with a lease of fraction over 61 years remaining. Noah informally approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Noah to invoke his statutory right. Noah procured expert legal guidance and was able to make a more informed decision and handle with the matter and sell the property.
Last Spring we were called by Mr and Mrs. A Mitchell , who acquired a garden apartment in Verwood in May 2012. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Comparative residencies in Verwood with a long lease were in the region of £183,600. The mid-range ground rent payable was £65 invoiced yearly. The lease expiry date was on 28 September 2081. Having 57 years unexpired we estimated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 plus professional charges.
In 2010 we were approached by Mr and Mrs. Y Adams who, having purchased a one bedroom apartment in Verwood in February 2003. We are asked if we could shed any light on how much (approximately) price could be to prolong the lease by a further 90 years. Comparable premises in Verwood with 100 year plus lease were worth £245,000. The average ground rent payable was £45 invoiced every twelve months. The lease came to a finish in 2092. Taking into account 68 years remaining we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.