Babbacombe leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Babbacombe residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Babbacombe you must check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Babbacombe leasehold, as your property will be more valuable and marketable in respect 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.
Last October Finn, came precariously near to the 80-year mark with the lease on his leasehold flat in Babbacombe. In buying his flat 19 years previously, the length of the lease was of little bearing. Fortunately, it dawned on him that he needed to take action soon on Extending the lease. Finn arranged for a lease extension just in the nick of time in May. Finn and the landlord subsequently agreed on an amount of £6,000 . If the lease had dropped below eighty years, the amount would have gone up by a minimum £1,000.
Last Winter we were e-mailed by Mr B Anderson , who moved into a newly refurbished apartment in Babbacombe in August 2010. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparative homes in Babbacombe with an extended lease were valued around £235,200. The average amount of ground rent was £45 invoiced quarterly. The lease finished in 2091. Given that there were 66 years left we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of professional charges.
Mr and Mrs. C Martin bought a newly refurbished flat in Babbacombe in August 1997. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Identical flats in Babbacombe with a long lease were valued around £275,000. The mid-range ground rent payable was £55 collected quarterly. The lease came to a finish on 22 April 2102. Considering the 77 years remaining we approximated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 not including fees.