Unfortunately that a Watchet residential lease is a wasting asset. The lease value reduces in proportion to its lease length. 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 Watchet property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Watchet will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold residencies in Watchet with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| 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. |
| Coventry Building Society | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 Watchet leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of unsuccessful negotiations with the freeholder of her leasehold flat in Watchet, Jade commenced the lease extension process just as her lease was coming close to the critical 80-year deadline. The legal work completed in May 2009. The freeholder’s costs were restricted to approximately 600 pounds.
In 2013 we were approached by Dr D Rose who, having bought a garden apartment in Watchet in February 2009. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Similar properties in Watchet with a long lease were worth £275,000. The average ground rent payable was £55 invoiced yearly. The lease lapsed in 2102. Having 76 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of costs.
Dr Kayleigh Morel purchased a basement apartment in Watchet in April 1998. The dilemma was if we could approximate the premium could be for a 90 year lease extension. Comparable properties in Watchet with a long lease were valued about £176,200. The average amount of ground rent was £65 invoiced per annum. The lease came to a finish in 2082. Taking into account 56 years unexpired we estimated the premium to the landlord to extend the lease to be within £29,500 and £34,000 plus expenses.