Main reasons to commence your Charmouth lease extension

Top reasons for lease extension now:

A Charmouth lease depreciates with the years remaining on the lease.

It’s an underpublicised certainty that a Charmouth residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Charmouth property market.Once your lease nears 85ish years, you should 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 dips under 80 years - otherwise a higher premium will be payable. The majority of flat owners in Charmouth will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some situations you may not qualify. 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 conveyancing solicitor for the duration of the process.

An extended lease has roughly the same value as a freehold

It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.

Lenders may not finance a property with a short lease

The trend since the credit crunch has been for mortgage companies to tighten lending criteria across the board - this has extended to the property over which the mortgage is to be granted. This has resulted in the unexpired lease term required by banks has increased. Historically lenders were content with twenty years plus the term of the loan - typically fifty year leases but those requirements evolved by the requirement for lengthy leases - many now have a minimum term of 75 years as standard.

Get in touch with one of our Charmouth lease extension solicitors or enfranchisement solicitors

Irrespective of whether you are a tenant or a freeholder in Charmouth,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Charmouth valuers.

Charmouth Lease Extension Case Studies:

Riley, Charmouth, Dorset

Last October Riley, started to get close to the 80-year mark with the lease on his first floor apartment in Charmouth. In buying his property 19 years ago, the unexpired term was of no importance. Luckily, it dawned on him that he would imminently be paying way over the odds for Extending the lease. Riley arranged for a lease extension just under the wire last May. Riley and the freeholder eventually settled on a premium of £5,000 . If he had missed the deadline, the premium would have gone up by at least £875.

Charmouth case:

In 2013 we were called by Mr D Hall who, having acquired a purpose-built flat in Charmouth in February 2007. The dilemma was if we could approximate the premium would be for a ninety year extension to my lease. Identical premises in Charmouth with 100 year plus lease were worth £300,000. The average amount of ground rent was £50 invoiced quarterly. The lease terminated on 21 November 2102. Having 76 years left we estimated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including professional charges.

Charmouth case:

Ms T Watson bought a one bedroom apartment in Charmouth in April 1997. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Identical premises in Charmouth with a long lease were worth £257,800. The mid-range ground rent payable was £65 billed annually. The lease expired on 8 May 2091. Having 65 years left we approximated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 plus expenses.