It’s an underpublicised truth that a Verwood residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Verwood property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher premium will be payable. The majority of flat owners in Verwood will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | |
| Coventry Building Society | |
| Santander | |
| TSB | |
| Royal Bank of Scotland |
The conveyancing solicitors that we work with undertake Verwood 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 conveyancer we work with provide it.
Charlie was the the leasehold proprietor of a studio apartment in Verwood being sold with a lease of just over sixty years unexpired. Charlie on an informal basis spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be due on a lease extension were Charlie to exercise his statutory right. Charlie procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last year we were phoned by Mr and Mrs. P Ali , who purchased a purpose-built apartment in Verwood in September 2007. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by ninety years. Identical premises in Verwood with a long lease were in the region of £264,000. The average amount of ground rent was £60 collected annually. The lease elapsed on 22 February 2079. Considering the 53 years remaining we approximated the premium to the landlord to extend the lease to be between £37,100 and £42,800 not including expenses.
In 2010 we were phoned by Mr and Mrs. T Cooper who, having owned a garden flat in Verwood in September 1998. The question was if we could approximate the premium would be for a ninety year extension to my lease. Comparative residencies in Verwood with an extended lease were valued around £225,400. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease lapsed on 16 September 2090. Given that there were 64 years unexpired we estimated the premium to the freeholder to extend the lease to be within £15,200 and £17,600 exclusive of professional charges.