The re-sale value of a leasehold property in Mersea Island is impacted by how many years the lease has left to run. If it is close to or fewer than eighty years you should foresee difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is ideal to start the lease extension process when a lease still has 82 years to run so that a lease extension can be addressed prior to the 80 year threshold. Statute enables Mersea Island qualifying lessees to acquire a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Mersea Island with in excess of 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Mersea Island,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Mersea Island valuers.
Callum was the the leasehold owner of a conversion apartment in Mersea Island being sold with a lease of a little over 61 years unexpired. Callum informally spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Callum to exercise his statutory right. Callum obtained expert legal guidance and secured satisfactory deal informally and sell the property.
In 2014 we were called by Dr L Lambert who, having bought a newly refurbished flat in Mersea Island in November 2003. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical residencies in Mersea Island with 100 year plus lease were in the region of £200,800. The mid-range ground rent payable was £65 billed annually. The lease came to a finish on 5 January 2086. Having 60 years outstanding we calculated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 not including professional charges.
Last Autumn we were called by Ms Francesca Roberts , who completed a newly refurbished apartment in Mersea Island in July 1999. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Identical premises in Mersea Island with 100 year plus lease were in the region of £255,000. The average amount of ground rent was £50 billed annually. The lease termination date was in 2097. Having 71 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.