The value of Newton Abbot leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate materialy once the remaining term is less than eighty years
It is generally considered that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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 are not acceptable. 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Using our service will provide you better control over the value of your Newton Abbot leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Oscar, came perilously near to the 80-year threshold with the lease on his garden apartment in Newton Abbot. In buying his flat two decades ago, the lease term was of minimal importance. by good luck, he recognised he needed to take steps soon on a lease extension. Oscar arranged for a lease extension at the eleventh hour last June. Oscar and the freeholder via the management company eventually agreed on sum of £5,500 . If the lease had dropped lower than eighty years, the figure would have increased by at least £950.
Dr C Bonnet moved into a one bedroom flat in Newton Abbot in July 1999. The dilemma was if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Comparative properties in Newton Abbot with a long lease were valued about £250,000. The mid-range ground rent payable was £50 collected every twelve months. The lease came to a finish in 2094. Considering the 68 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £10,500 and £12,000 plus expenses.
In 2012 we were approached by Dr T Lee who, having owned a purpose-built flat in Newton Abbot in April 2010. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar residencies in Newton Abbot with 100 year plus lease were in the region of £285,000. The mid-range ground rent payable was £55 billed yearly. The lease came to a finish on 12 November 2105. Considering the 79 years as a residual term we approximated the premium to the landlord to extend the lease to be between £13,300 and £15,400 not including fees.