Paignton Lease Extension - Free Consultation

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Top reasons for Paignton lease extension


Top reasons for lease extension now:

Increase your lease and increase your Paignton property value

It’s an underpublicised truth that a Paignton residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Paignton property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be payable. Most flat owners in Paignton will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer throughout the formalities.

An extended lease has roughly the same value as a freehold

Leasehold premises in Paignton with over 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.

Banks and Building Societies may decide not to lend with a short lease

Lending institutions are less likely to issue a mortgage on a residential property in Paignton with a short lease. Some lenders simply refuse a mortgage on leases with under 75 years remaining.

Lender Requirement
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;
Chelsea Building Society 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.
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
Yorkshire Building Society 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.

Get in touch with one of our Paignton lease extension solicitors or enfranchisement solicitors

The conveyancers that we work with procure Paignton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.

Paignton Lease Extension Example Cases:

Lucas, Paignton, Devon

Last year Lucas, started to get near to the 80-year threshold with the lease on his first floor apartment in Paignton. In buying his property 19 years ago, the unexpired term was of no significance. by good luck, he realised he would soon be paying an escalated premium for Extending the lease. Lucas was able to extend his lease just ahead of time last August. Lucas and the landlord in the end settled on sum of £6,000 . If the lease had slipped to less than 80 years, the sum would have escalated by a minimum £950.

Paignton case:

Last Winter we were approach by Mrs P Patel , who acquired a studio apartment in Paignton in June 1998. The question was if we could estimate the premium would be to extend the lease by a further 90 years. Comparable premises in Paignton with a long lease were in the region of £200,000. The mid-range ground rent payable was £50 invoiced annually. The lease termination date was in 2102. Given that there were 78 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of legals.

Paignton case:

In 2009 we were contacted by Mr and Mrs. V Girard who, having purchased a first floor apartment in Paignton in February 1999. We are asked if we could estimate the premium could be for a 90 year lease extension. Comparable properties in Paignton with 100 year plus lease were in the region of £267,600. The average ground rent payable was £65 invoiced quarterly. The lease terminated on 27 May 2091. Given that there were 67 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £14,300 and £16,400 plus expenses.