It’s a harsh certainty that a Bearsted residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Bearsted property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining dips 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. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Bearsted will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | |
| Halifax | |
| Leeds Building Society | |
| The Mortgage Works | |
| Royal Bank of Scotland |
The conveyancing solicitors that we work with undertake Bearsted 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 lawyer we work with provide it.
Nathan owned a conversion apartment in Bearsted being marketed with a lease of a few days over fifty eight years remaining. Nathan on an informal basis spoke with his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Nathan to exercise his statutory right. Nathan obtained expert advice and secured an acceptable deal informally and sell the flat.
In 2009 we were contacted by Dr T Baker who, having acquired a purpose-built apartment in Bearsted in May 2006. The question was if we could approximate the price would likely be for a 90 year lease extension. Similar homes in Bearsted with 100 year plus lease were worth £225,400. The average ground rent payable was £45 billed monthly. The lease elapsed in 2090. Given that there were 64 years unexpired we estimated the compensation to the landlord to extend the lease to be within £16,200 and £18,600 plus fees.
In 2011 we were contacted by Dr Molly Díaz who, having completed a one bedroom apartment in Bearsted in June 2004. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Comparable premises in Bearsted with 100 year plus lease were in the region of £270,000. The mid-range ground rent payable was £55 billed quarterly. The lease expired on 18 February 2101. Taking into account 75 years left we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.