It’s a harsh truth that a Bridgwater residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Bridgwater property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining slips under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Bridgwater will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth roughly the same 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 decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
Retaining our service gives you increased control over the value of your Bridgwater leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Thomas was the the leasehold proprietor of a high value flat in Bridgwater being sold with a lease of a little over fifty eight years remaining. Thomas on an informal basis approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Thomas to invoke his statutory right. Thomas obtained expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
In 2009 we were approached by Mr and Mrs. M Cooper who, having acquired a ground floor flat in Bridgwater in March 1995. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Comparable properties in Bridgwater with an extended lease were in the region of £250,400. The average ground rent payable was £65 invoiced every twelve months. The lease end date was in 2089. Having 64 years remaining we approximated the compensation to the freeholder for the lease extension to be within £19,000 and £22,000 not including fees.
Last Christmas we were approach by Mr and Mrs. N Scott , who completed a one bedroom apartment in Bridgwater in February 2008. The question was if we could approximate the compensation to the landlord could be to extend the lease by a further 90 years. Similar homes in Bridgwater with a long lease were in the region of £189,000. The average amount of ground rent was £55 billed yearly. The lease finished in 2078. Considering the 53 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of legals.