Mersea Island leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Mersea Island tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Mersea Island you should check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Mersea Island with more than one hundred years unexpired 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 buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| 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; |
| Halifax | Minimum 70 years from the date 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Mersea Island can be a difficult process. We recommend you obtain guidance from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Mersea Island lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ben owned a conversion apartment in Mersea Island being sold with a lease of just over 61 years left. Ben on an informal basis spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Ben to invoke his statutory right. Ben procured expert legal guidance and secured satisfactory resolution informally and readily saleable.
In 2012 we were e-mailed by Mrs Grace Hall who, having took over the lease of a ground floor apartment in Mersea Island in January 2001. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by an additional years. Identical properties in Mersea Island with a long lease were valued around £225,400. The mid-range amount of ground rent was £45 billed every twelve months. The lease finished on 21 January 2090. Considering the 64 years as a residual term we calculated the premium to the landlord to extend the lease to be between £16,200 and £18,600 plus fees.
In 2013 we were approached by Dr Phoebe García who, having completed a one bedroom flat in Mersea Island in April 2004. We are asked if we could approximate the price could be for a ninety year lease extension. Identical properties in Mersea Island with an extended lease were valued about £270,000. The average amount of ground rent was £55 collected per annum. The lease lapsed on 3 July 2101. Considering the 75 years remaining we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.