It’s a harsh truth that a Charmouth residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Charmouth property market.Where your lease has approximately 90 years left, you should start thinking about 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 dips lower than eighty years - otherwise a higher premium will be payable. Most leasehold owners in Charmouth will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some cases you may not qualify. 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 lawyer for the duration of the process.
Leasehold properties in Charmouth with in excess of 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| 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 will provide you better control over the value of your Charmouth leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Luke was the the leasehold owner of a conversion flat in Charmouth being sold with a lease of a little over sixty years outstanding. Luke informally approached his landlord being a well known London-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Luke to exercise his statutory right. Luke obtained expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
In 2009 we were phoned by Mr and Mrs. I Díaz who, having purchased a purpose-built apartment in Charmouth in October 2004. The dilemma was if we could approximate the premium would likely be to prolong the lease by 90 years. Comparative properties in Charmouth with an extended lease were in the region of £206,200. The mid-range amount of ground rent was £60 collected quarterly. The lease ran out in 2082. Given that there were 56 years as a residual term we calculated the premium to the landlord to extend the lease to be between £31,400 and £36,200 not including costs.
In 2011 we were contacted by Ms Paige Gómez who, having was assigned a lease of a purpose-built flat in Charmouth in May 2006. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Identical residencies in Charmouth with 100 year plus lease were valued about £300,000. The average ground rent payable was £50 collected monthly. The lease lapsed in 2102. Having 76 years as a residual term we estimated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including professional charges.