As the length of the unexpired term of a Paignton domestic lease decreases so does its value and therefore the value of your property. If the residual term has, more than 125 years remaining then this decrease may be of little impact nevertheless there will become a stage when a lease has less than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the main logic behind why you should consider extending without delay. Many flat owners in Paignton will qualify for this right; nevertheless a conveyancer will be able to confirm whether you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold residencies in Paignton with over 100 years left on the lease are sometimes 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 to be gained by purchasing the freehold unless savings on ground rent and estate charges justify it.
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors 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 conveyancing solicitor we work with provide it.
In recent months Jamie, started to get close to the eighty-year mark with the lease on his two bedroom apartment in Paignton. In buying his home 19 years ago, the unexpired term was of little significance. Fortunately, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. Jamie was able to extend his lease just ahead of time in January. Jamie and the freeholder via the management company eventually settled on the final figure of £5,500 . If the lease had dropped to less than 80 years, the amount would have gone up by a minimum £1,100.
Last Spring we were contacted by Mr L Ramírez , who acquired a newly refurbished flat in Paignton in April 2008. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Identical properties in Paignton with an extended lease were valued about £260,200. The average ground rent payable was £65 billed quarterly. The lease lapsed in 2091. Taking into account 66 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £16,200 and £18,600 plus costs.
Last Autumn we were called by Mrs P Alexander , who took over the lease of a garden apartment in Paignton in June 2004. The question was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Similar residencies in Paignton with 100 year plus lease were worth £198,800. The mid-range ground rent payable was £55 collected monthly. The lease lapsed on 19 August 2080. Considering the 55 years left we approximated the premium to the landlord to extend the lease to be between £33,300 and £38,400 not including professional charges.