Charmouth leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Charmouth tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Charmouth you would be well advised to check if your lease has between seventy and ninety years left. There are compelling reasons why a Charmouth leaseholder with a lease having around eighty years unexpired should take action to ensure that a lease extension is actioned without delay
It is conventional wisdom that a property with over 100 years remaining is worth roughly the same 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 ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Charmouth 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 conveyancing solicitor we work with provide it.
Last year Blake, started to get near to the 80-year threshold with the lease on his purpose- built apartment in Charmouth. Having bought his home twenty years ago, the lease term was of little interest. As luck would have it, he noticed he needed to take action soon on a lease extension. Blake was able to extend his lease just under the wire last January. Blake and the freeholder via the managing agents ultimately agreed on the final figure of £5,500 . If the lease had gone lower than 80 years, the figure would have gone up by at least £975.
Mr and Mrs. V Watson bought a one bedroom apartment in Charmouth in November 1997. The dilemma was if we could approximate the price could be for a 90 year lease extension. Identical residencies in Charmouth with 100 year plus lease were valued about £275,000. The average ground rent payable was £65 billed quarterly. The lease lapsed on 19 March 2094. Considering the 68 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including expenses.
In 2013 we were approached by Mr and Mrs. U Hill who, having acquired a one bedroom apartment in Charmouth in February 2004. The question was if we could estimate the price would be to extend the lease by an additional years. Similar flats in Charmouth with 100 year plus lease were in the region of £213,600. The average ground rent payable was £60 billed yearly. The lease expiry date was in 2083. Given that there were 57 years remaining we calculated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 not including legals.