Watchet leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Watchet residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Watchet you must investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is generally considered that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancing solicitors that we work with undertake Watchet 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 lawyer we work with provide it.
Last year Jonathan, came dangerously near to the eighty-year threshold with the lease on his studio flat in Watchet. Having bought his property two decades ago, the length of the lease was of minimal importance. Fortunately, he realised he would soon be paying an inflated amount for a lease extension. Jonathan arranged for a lease extension at the eleventh hour last June. Jonathan and the freeholder via the management company eventually agreed on the final figure of £6,000 . If the lease had descended to less than 80 years, the premium would have gone up by at least £1,100.
In 2012 we were e-mailed by Ms Eleanor Adams who, having acquired a purpose-built flat in Watchet in June 2003. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Identical properties in Watchet with a long lease were valued about £193,400. The average ground rent payable was £65 invoiced yearly. The lease terminated on 7 February 2085. Taking into account 59 years as a residual term we approximated the premium to the landlord for the lease extension to be between £21,900 and £25,200 not including professional charges.
Last Summer we were contacted by Dr Zachary Mason , who acquired a recently refurbished apartment in Watchet in February 2006. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Identical homes in Watchet with a long lease were worth £255,000. The mid-range ground rent payable was £50 collected every twelve months. The lease came to a finish in 2096. Considering the 70 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including professional charges.