Mere leases on residential properties are gradually losing value. if your lease has about ninety years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for the lease extension to be in place before the term of the current lease dips below eighty years - otherwise a higher amount will be payable. Leasehold owners in Mere will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to confirm if you qualify. In some circumstances you may not be entitled. There are also strict deadlines and formalities to follow once the process has started so it’s sensible to be guided by a conveyancer during the process.
Leasehold residencies in Mere with more than one hundred 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 premises. In such circumstances there is often little upside in purchasing 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
Engaging our service gives you better control over the value of your Mere leasehold, as your property will be more valuable and marketable in terms of lease length should you want 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.
John owned a 2 bedroom apartment in Mere being sold with a lease of fraction over 61 years unexpired. John on an informal basis contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 annually. No ground rent would be payable on a lease extension were John to exercise his statutory right. John procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
In 2013 we were contacted by Mrs Chantelle Bailey who, having bought a ground floor apartment in Mere in June 2001. The question was if we could approximate the price could be for a 90 year extension to my lease. Similar residencies in Mere with a long lease were in the region of £250,400. The mid-range ground rent payable was £65 billed yearly. The lease terminated on 23 November 2089. Having 64 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £19,000 and £22,000 plus expenses.
Last Summer we were approach by Mrs Hollie Wilson , who acquired a purpose-built apartment in Mere in May 2008. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Comparative residencies in Mere with 100 year plus lease were in the region of £189,000. The mid-range ground rent payable was £55 billed monthly. The lease termination date was on 21 August 2078. Taking into account 53 years remaining we calculated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 not including fees.