Beaminster Lease Extension - Free Consultation

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Why you should start your Beaminster lease extension


Why you should start your Beaminster lease extension today:

Increase your lease and increase your Beaminster property value

Owning a flat usually means owning a lease of the property, which has a set term of years. your lease will ordinarily be granted for a set period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Beaminster. Clearly, the period of lease remaining reduces as time goes by. This is often ignored and only raises itself as an issue when the property needs to be sold or refinanced. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension. Eligible long lease owners in Beaminster have the right to extend the lease for a further 90 years in accordance with legislation. Please give careful deliberation before putting off your Beaminster lease extension. Putting off that expense now simply increases the price you will ultimately have to pay to extend your lease

An extended lease is almost the same value as a freehold

Leasehold properties in Beaminster with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant it.

Lending institutions may not grant a mortgage with a short lease

The propensity since the credit crunch has been for banks to tighten lending criteria generally - this has extended to the property over which the mortgage is to be granted. This has resulted in the unexpired lease term required by lenders has increased. Historically mortgage companies were content with twenty years plus the term of the loan - routinely 50 year leases but those requirements are being increasingly undermined by the requirement for longer and longer leases - many now have a minimum term of 75 years as standard.

Lender Requirement
Bank of Scotland Minimum 70 years from the date of the mortgage.
Barclays plc Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below).

Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office.

Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval:

• Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND
• The value of the property subject to the short remaining term is £500,000 or more AND
• The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing;
Birmingham Midshires Minimum 70 years from the date of the mortgage.
Chelsea 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.
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.

Get in touch with one of our Beaminster lease extension solicitors or enfranchisement solicitors

Regardless of whether you are a tenant or a freeholder in Beaminster,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Beaminster valuers.

Beaminster Lease Extension Case Studies:

Matthew, Beaminster, Dorset,

Matthew owned a 2 bedroom flat in Beaminster being marketed with a lease of fraction over 59 years left. Matthew on an informal basis approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Matthew to invoke his statutory right. Matthew procured expert advice and was able to make a more informed judgement and deal with the matter and sell the flat.

Beaminster case:

In 2010 we were approached by Mr and Mrs. M Young who, having bought a one bedroom flat in Beaminster in April 2006. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Comparative residencies in Beaminster with 100 year plus lease were valued about £166,400. The mid-range ground rent payable was £60 collected quarterly. The lease came to a finish in 2076. Given that there were 54 years unexpired we calculated the premium to the landlord for the lease extension to be between £32,300 and £37,400 not including legals.

Beaminster case:

Last Autumn we were phoned by Dr Blake Cooper , who took over the lease of a recently refurbished apartment in Beaminster in April 1998. We are asked if we could shed any light on how much (approximately) price would likely be to prolong the lease by ninety years. Comparative properties in Beaminster with a long lease were valued around £227,800. The average amount of ground rent was £45 billed every twelve months. The lease end date was on 9 September 2087. Considering the 65 years left we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including legals.