Owning a flat usually means owning a lease of the property, which has a finite term of years. The lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Exeter. Clearly, the term of lease remaining shortens over time. This may pass by relatively unnoticed when the property needs to be disposed of or re-mortgaged. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension. Qualifying long lease owners in Exeter have the right to extend the lease for an additional ninety years under statute. You should give due deliberation before delaying your Exeter lease extension. Holding off that expense now only increases the price you will ultimately have to pay to extend your lease
Leasehold properties in Exeter with over 100 years outstanding 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 premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Exeter,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Exeter valuers.
Leo was the the leasehold owner of a studio apartment in Exeter on the market with a lease of a little over 72 years unexpired. Leo on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Leo to exercise his statutory right. Leo obtained expert legal guidance and secured an acceptable resolution without going to tribunal and sell the flat.
Last Spring we were approach by Mr and Mrs. N Lefèvre , who owned a one bedroom flat in Exeter in November 2010. The question was if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable premises in Exeter with an extended lease were valued about £181,600. The mid-range ground rent payable was £55 invoiced per annum. The lease lapsed on 1 June 2077. Considering the 52 years remaining we approximated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 exclusive of expenses.
Mr and Mrs. P Howard owned a ground floor flat in Exeter in July 2008. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Identical flats in Exeter with a long lease were worth £290,000. The mid-range amount of ground rent was £45 collected annually. The lease ran out in 2097. Taking into account 72 years left we approximated the premium to the landlord for the lease extension to be within £11,400 and £13,200 plus professional charges.