Unfortunately that a Somerton residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Somerton property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term dips below 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Somerton will be able to extend under the legislation; however a lawyer should be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold residencies in Somerton with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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. |
Retaining our service gives you enhanced control over the value of your Somerton leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to protracted negotiations with the freeholder of her two bedroom apartment in Somerton, Bethany commenced the lease extension process as the eighty year deadline was rapidly advancing. The lease extension was finalised in September 2010. The landlord’s fees were negotiated to below 450 GBP.
Last Winter we were contacted by Ms O Lefebvre , who purchased a ground floor flat in Somerton in March 2009. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by an additional years. Identical premises in Somerton with a long lease were worth £235,200. The mid-range ground rent payable was £45 billed yearly. The lease ran out in 2091. Having 66 years as a residual term we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of legals.
Last Autumn we were e-mailed by Mrs Isobel Lefebvre , who was assigned a lease of a purpose-built flat in Somerton in January 2002. We are asked if we could estimate the price could be to extend the lease by ninety years. Comparable flats in Somerton with a long lease were worth £275,000. The mid-range ground rent payable was £55 billed yearly. The lease lapsed in 2102. Considering the 77 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 not including professional charges.