It’s an underpublicised truth that a Beaworthy 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 Beaworthy property market.Where your lease has approximately ninety years left, you need to 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 below eighty years - otherwise a higher amount will be payable. Most leasehold owners in Beaworthy 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 timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold residencies in Beaworthy with over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Beaworthy 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.
Finley owned a high value apartment in Beaworthy being sold with a lease of just over 72 years left. Finley informally contacted his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Finley to invoke his statutory right. Finley obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
Dr Jodie Parker moved into a first floor flat in Beaworthy in January 2011. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparable premises in Beaworthy with a long lease were in the region of £210,600. The mid-range amount of ground rent was £45 billed every twelve months. The lease terminated on 26 April 2087. Considering the 62 years unexpired we calculated the premium to the freeholder to extend the lease to be between £18,100 and £20,800 plus expenses.
In 2011 we were phoned by Mr and Mrs. I Cooper who, having owned a one bedroom apartment in Beaworthy in January 1996. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year extension to my lease. Similar properties in Beaworthy with 100 year plus lease were worth £265,000. The average amount of ground rent was £50 collected annually. The lease concluded on 18 July 2098. Taking into account 73 years unexpired we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including expenses.