Unfortunately that a Calstock residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Calstock property market.Where your lease has approximately ninety years left, you should start considering a lease extension. If the number of years remaining slips under eighty 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 leasehold owners in Calstock will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold properties in Calstock with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service 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. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Calstock leasehold, as your property will be more valuable and saleable in respect of lease length should you decide 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 Lucas, started to get near to the eighty-year mark with the lease on his ground floor flat in Calstock. In buying his home 18 years ago, the unexpired term was of little importance. Fortunately, he noticed he needed to take steps soon on Extending the lease. Lucas arranged for a lease extension just under the wire in June. Lucas and the freeholder ultimately agreed on sum of £5,500 . If the lease had slid lower than 80 years, the price would have escalated by a minimum £1,075.
In 2013 we were called by Mr and Mrs. O Parker who, having owned a first floor apartment in Calstock in September 2012. The question was if we could approximate the price would be for a ninety year lease extension. Identical properties in Calstock with an extended lease were in the region of £235,200. The average ground rent payable was £45 invoiced annually. The lease lapsed on 21 February 2091. Taking into account 66 years unexpired we estimated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus fees.
Dr J Díaz was assigned a lease of a purpose-built flat in Calstock in September 2005. The dilemma was if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparative residencies in Calstock with a long lease were worth £280,000. The average ground rent payable was £55 collected per annum. The lease termination date was on 6 February 2102. Taking into account 77 years remaining we estimated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 plus fees.