Merriott leases on residential deteriorating in value. Where your lease has about ninety years remaining, you should start considering the need for a lease extension. 80 years is a significant number: when the remaining term of a lease dips below this level then you begin paying an additional element called marriage value. Flat owners in Merriott will mostly qualify for a lease extension; however It would be wise to check with a conveyancer to check your eligibility. In certain cases you may not be entitled. There are also strict timetables and formalities to follow once the process is initiated so it’s prudent to be guided by a conveyancing solicitor during the process.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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 be at least 30 years plus the term of the mortgage at the outset 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 lawyers that we work with handle Merriott 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 conveyancing solicitor we work with provide it.
Last Summer Alexander, came critically close to the eighty-year threshold with the lease on his one bedroom apartment in Merriott. In buying his property twenty years ago, the unexpired term was of no relevance. Fortunately, he noticed he needed to take action soon on a lease extension. Alexander arranged for a lease extension just in the nick of time in August. Alexander and the landlord in the end agreed on a premium of £5,500 . If he not met the deadline, the price would have increased by a minimum £950.
In 2010 we were e-mailed by Mr and Mrs. A Bertrand who, having was assigned a lease of a purpose-built apartment in Merriott in January 1999. The dilemma was if we could approximate the premium would likely be to extend the lease by 90 years. Identical flats in Merriott with a long lease were valued about £264,000. The average ground rent payable was £60 billed monthly. The lease elapsed on 18 July 2079. Considering the 53 years remaining we approximated the premium to the freeholder for the lease extension to be within £37,100 and £42,800 plus expenses.
In 2014 we were called by Ms Elizabeth Morgan who, having purchased a purpose-built flat in Merriott in June 2006. The dilemma was if we could approximate the price would be to prolong the lease by a further 90 years. Comparative homes in Merriott with a long lease were worth £220,400. The average amount of ground rent was £45 billed monthly. The lease terminated on 24 February 2090. Taking into account 64 years remaining we approximated the compensation to the freeholder for the lease extension to be between £15,200 and £17,600 exclusive of fees.