Mersea Island leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Mersea Island residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Mersea Island you must see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Mersea Island with over one hundred 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 home. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Using our service gives you enhanced control over the value of your Mersea Island leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Harry, came precariously close to the 80-year threshold with the lease on his ground floor apartment in Mersea Island. Having purchased his flat two decades ago, the unexpired term was of no concern. Luckily, he realised he needed to take steps soon on Extending the lease. Harry arranged for a lease extension just in the nick of time in March. Harry and the landlord who owned the flat above in the end settled on an amount of £5,000 . If the lease had descended below eighty years, the sum would have escalated by a minimum £1,075.
In 2012 we were e-mailed by Mr and Mrs. U Pérez who, having completed a basement apartment in Mersea Island in July 2012. We are asked if we could estimate the price would likely be to extend the lease by ninety years. Comparable properties in Mersea Island with a long lease were in the region of £270,000. The average amount of ground rent was £55 collected per annum. The lease end date was on 2 June 2100. Taking into account 75 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including expenses.
Last January we were approach by Mr Blake Rivera , who bought a one bedroom flat in Mersea Island in June 1998. The question was if we could shed any light on how much (approximately) price would be for a ninety year extension to my lease. Similar premises in Mersea Island with a long lease were valued around £168,800. The mid-range ground rent payable was £60 invoiced per annum. The lease expired in 2080. Having 55 years outstanding we calculated the premium to the landlord for the lease extension to be within £31,400 and £36,200 plus costs.