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 cost of extending the lease can increase substantially once the remaining term is below than eighty years
Leasehold properties in Newton Abbot with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest 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; |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Newton Abbot can be a difficult process. We recommend you secure guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Newton Abbot lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Callum was the the leasehold proprietor of a studio flat in Newton Abbot being sold with a lease of a little over 72 years unexpired. Callum on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 per annum. No ground rent would be payable on a lease extension were Callum to exercise his statutory right. Callum obtained expert legal guidance and secured an acceptable resolution informally and readily saleable.
Last Christmas we were contacted by Dr Abbie Cox , who took over the lease of a basement flat in Newton Abbot in September 1996. We are asked if we could approximate the price would be to prolong the lease by ninety years. Identical premises in Newton Abbot with an extended lease were in the region of £280,000. The average amount of ground rent was £55 billed per annum. The lease elapsed on 16 March 2104. Having 78 years remaining we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including fees.
In 2009 we were approached by Mrs Rachel Adams who, having acquired a one bedroom apartment in Newton Abbot in February 2012. The question was if we could estimate the premium could be to extend the lease by ninety years. Comparable premises in Newton Abbot with a long lease were worth £191,000. The mid-range amount of ground rent was £65 collected quarterly. The lease finished in 2084. Given that there were 58 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £23,800 and £27,400 plus fees.