Unfortunately that a Weymouth residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Weymouth property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If the number of years remaining dips below 80 years, you will then be required to pay 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 Weymouth will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold residencies in Weymouth with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you better control over the value of your Weymouth leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Ryan, started to get close to the eighty-year mark with the lease on his garden apartment in Weymouth. In buying his flat 18 years previously, the length of the lease was of minimal concern. As luck would have it, he noticed he needed to take action soon on a lease extension. Ryan was able to extend his lease at the eleventh hour in April. Ryan and the freeholder in the end settled on the final figure of £5,000 . If the lease had dipped below 80 years, the figure would have increased by a minimum £1,100.
In 2012 we were e-mailed by Dr Ali Bonnet who, having owned a ground floor apartment in Weymouth in June 2007. We are asked if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Comparative properties in Weymouth with 100 year plus lease were in the region of £265,000. The average ground rent payable was £55 billed annually. The lease finished in 2100. Taking into account 74 years remaining we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of costs.
In 2010 we were phoned by Mrs W Cook who, having owned a first floor apartment in Weymouth in February 2005. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Identical properties in Weymouth with 100 year plus lease were in the region of £166,400. The average amount of ground rent was £60 collected every twelve months. The lease expiry date was on 2 September 2080. Having 54 years left we estimated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 plus costs.