For anyone whose Newton Abbot home is held on a long lease, our message is clear – if you do nothing, your property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
Leasehold premises in Newton Abbot with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges justify 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
Irrespective of whether you are a tenant or a landlord in Newton Abbot,the lease extension lawyers 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 Newton Abbot valuers.
Aaron owned a conversion apartment in Newton Abbot on the market with a lease of fraction over 59 years unexpired. Aaron informally contacted his freeholder being a well known Bristol-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 on the basis of an increased rent to £125 yearly. Ordinarily, ground rent would not be payable on a lease extension were Aaron to invoke his statutory right. Aaron procured expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Last Summer we were contacted by Dr A Watson , who purchased a studio flat in Newton Abbot in February 1995. The question was if we could approximate the price would be for a 90 year extension to my lease. Similar properties in Newton Abbot with 100 year plus lease were worth £225,400. The average ground rent payable was £45 billed every twelve months. The lease came to a finish on 4 March 2090. Taking into account 64 years remaining we estimated the premium to the landlord to extend the lease to be within £15,200 and £17,600 exclusive of fees.
Last Winter we were called by Dr Aaron Roux , who completed a basement apartment in Newton Abbot in May 2004. We are asked if we could approximate the price would be for a ninety year lease extension. Comparative properties in Newton Abbot with an extended lease were worth £270,000. The mid-range ground rent payable was £55 collected quarterly. The lease termination date was in 2101. Considering the 75 years unexpired we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including legals.