Unfortunately that a Beaminster 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 early years due to the deflation being disguised by increases in the Beaminster property market.Where your lease has approximately 90 years left, you should start considering 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 slips lower than eighty years - otherwise a higher premium will be payable. The majority of flat owners in Beaminster will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is generally considered that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you better control over the value of your Beaminster leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas Henry, started to get close to the eighty-year mark with the lease on his first floor flat in Beaminster. In buying his property 18 years ago, the length of the lease was of no concern. Fortunately, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Henry arranged for a lease extension just under the wire in July. Henry and the landlord in the end agreed on sum of £5,000 . If he had missed the deadline, the figure would have become more exhorbitant by a minimum £1,075.
In 2012 we were phoned by Mr and Mrs. L Lee who, having owned a garden apartment in Beaminster in November 2012. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Identical properties in Beaminster with 100 year plus lease were worth £246,800. The average amount of ground rent was £60 invoiced annually. The lease elapsed in 2075. Considering the 50 years remaining we calculated the premium to the freeholder for the lease extension to be within £44,700 and £51,600 not including professional charges.
Last year we were e-mailed by Dr Aiden Rogers , who took over the lease of a first floor apartment in Beaminster in June 2009. The dilemma was if we could estimate the price would likely be for a ninety year lease extension. Identical premises in Beaminster with 100 year plus lease were in the region of £208,200. The average ground rent payable was £65 invoiced every twelve months. The lease lapsed in 2086. Taking into account 61 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 not including fees.