Minehead leases on residential properties are gradually losing value. Where your lease has in the region of 90 years unexpired, you should start thinking about a lease extension. An important point to note is that it is desirable for your lease extension to take place before the term of the current lease falls under 80 years - otherwise a higher amount will be payable. Leasehold owners in Minehead will mostly be legally entitled to a lease extension; however a solicitor will check if you qualify. In some situations you may not be entitled. There are prescribed timetables and procedures to follow once the process has started so it’s best to be guided by a conveyancer during the process.
Leasehold residencies in Minehead with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
The conveyancers that we work with handle Minehead 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 conveyancer we work with provide it.
Kyle owned a 2 bedroom flat in Minehead being marketed with a lease of a few days over 72 years outstanding. Kyle on an informal basis approached his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Kyle to invoke his statutory right. Kyle obtained expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
Mr and Mrs. G Norbert owned a basement apartment in Minehead in October 2000. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by ninety years. Comparative flats in Minehead with 100 year plus lease were valued around £270,000. The average amount of ground rent was £55 billed per annum. The lease termination date was on 14 May 2101. Considering the 75 years remaining we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including expenses.
In 2011 we were phoned by Mr Eli Bertrand who, having completed a garden apartment in Minehead in May 2009. The question was if we could approximate the price would likely be for a 90 year extension to my lease. Identical properties in Minehead with 100 year plus lease were worth £173,800. The average amount of ground rent was £65 billed every twelve months. The lease finished on 23 August 2081. Having 55 years unexpired we calculated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 exclusive of costs.