With a residential leasehold premises in Lynmouth, you are actually purchasing a right to live in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are fewer than 80 years remaining. Residents in Lynmouth with a lease drawing near to 81 years remaining should seriously consider extending it without delay. When the lease term has less than eighty years left, under the relevant legislation the freeholder can calculate and charge a larger amount, based on a technical calculation, known as “marriage value” which is due.
It is generally accepted that a property with more than 100 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 |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancers that we work with undertake Lynmouth 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.
Hunter owned a high value apartment in Lynmouth being sold with a lease of just over 72 years remaining. Hunter on an informal basis contacted his landlord being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Hunter to invoke his statutory right. Hunter procured expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
Last month we were called by Mrs Bethan Hill , who took over the lease of a garden flat in Lynmouth in February 1999. We are asked if we could shed any light on how much (roughly) price would likely be to prolong the lease by a further 90 years. Similar premises in Lynmouth with 100 year plus lease were in the region of £237,600. The average amount of ground rent was £45 invoiced every twelve months. The lease ended on 2 April 2093. Given that there were 67 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £11,400 and £13,200 plus professional charges.
Last year we were e-mailed by Mr Jake Gunderson , who owned a one bedroom apartment in Lynmouth in August 2012. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Comparative homes in Lynmouth with 100 year plus lease were worth £280,000. The mid-range amount of ground rent was £55 collected per annum. The lease expired in 2104. Having 78 years left we approximated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 plus expenses.