Paignton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Most owners of residential leasehold property in Paignton enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Paignton you must check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Paignton with in excess of one hundred years remaining 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 home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Paignton,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 Paignton valuers.
Twenty four months ago Freddie, started to get near to the eighty-year threshold with the lease on his leasehold apartment in Paignton. In buying his flat two decades ago, the lease term was of no importance. As luck would have it, he noticed he needed to take action soon on a lease extension. Freddie extended the lease at the eleventh hour last August. Freddie and the landlord who owned the flat above eventually settled on an amount of £6,000 . If he failed to meet the deadline, the premium would have gone up by a minimum £1,125.
In 2010 we were approached by Mr Ethan Ramírez who, having completed a one bedroom apartment in Paignton in March 1999. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Comparable flats in Paignton with a long lease were worth £166,800. The average amount of ground rent was £50 collected yearly. The lease terminated on 2 January 2076. Taking into account 50 years remaining we calculated the premium to the landlord for the lease extension to be within £32,300 and £37,400 exclusive of expenses.
Mr V Clark bought a first floor flat in Paignton in May 2004. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparative flats in Paignton with an extended lease were worth £280,000. The average ground rent payable was £45 collected yearly. The lease ran out on 9 March 2096. Taking into account 70 years remaining we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus legals.