It’s an underpublicised truth that a Ilminster residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Ilminster property prices.Where your lease has approximately ninety years left, you should start considering a lease extension. If the number of years remaining falls below 80 years, you will end up paying half 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 The majority of leasehold owners in Ilminster 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 qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold residencies in Ilminster with in excess of 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges warrant 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Ilminster,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Ilminster valuers.
Max owned a 2 bedroom apartment in Ilminster on the market with a lease of a little over sixty years unexpired. Max on an informal basis approached his landlord being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Max to exercise his statutory right. Max procured expert legal guidance and was able to make an informed judgement and deal with the matter and readily saleable.
Dr C Sánchez owned a first floor flat in Ilminster in June 2006. We are asked if we could estimate the price could be for a 90 year extension to my lease. Comparable homes in Ilminster with an extended lease were worth £280,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease lapsed in 2094. Having 69 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.
Last month we were contacted by Mr and Mrs. E Harris , who completed a garden flat in Ilminster in August 2012. We are asked if we could shed any light on how much (roughly) price could be to prolong the lease by an additional years. Similar homes in Ilminster with 100 year plus lease were worth £216,000. The average ground rent payable was £60 invoiced yearly. The lease finished in 2083. Given that there were 58 years unexpired we approximated the premium to the landlord to extend the lease to be within £28,500 and £33,000 not including expenses.