The value of Watchet leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase substantially once the unexpired lease term is below than eighty years
Leasehold properties in Watchet with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Watchet can be a difficult process. We recommend you get guidance from a lawyer and valuer with experience in this area.
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 dealing with Watchet lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Half a year ago Eli, came seriously close to the 80-year mark with the lease on his purpose- built flat in Watchet. In buying his home two decades ago, the unexpired term was of minimal concern. Luckily, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Eli arranged for a lease extension just under the wire last June. Eli and the freeholder via the management company subsequently settled on an amount of £5,000 . If the lease had slid below 80 years, the amount would have escalated by a minimum £950.
Last Autumn we were called by Mr and Mrs. R Wilson , who owned a newly refurbished flat in Watchet in September 1995. The question was if we could estimate the premium would be to extend the lease by 90 years. Similar residencies in Watchet with an extended lease were worth £183,600. The mid-range amount of ground rent was £65 invoiced quarterly. The lease elapsed on 20 November 2083. Considering the 57 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 plus legals.
Mr and Mrs. T Cook was assigned a lease of a garden apartment in Watchet in August 1996. The dilemma was if we could approximate the premium would likely be for a 90 year extension to my lease. Identical premises in Watchet with an extended lease were in the region of £250,000. The mid-range ground rent payable was £50 collected monthly. The lease end date was in 2094. Taking into account 68 years outstanding we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.