The market value of a leasehold property in Paignton depends on how long the lease has left to run. If it is near to or fewer than eighty years you should envisage problems on re-sale, so it is advisable to arrange for a lease extension ahead of buying. Ideally one should start the lease extension process when a lease still has 82 years remaining so that all matters can be concluded ahead of the 80 year mark. Current legislation enables Paignton qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | 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 75 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 solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Paignton valuers.
Jonathan owned a high value flat in Paignton on the market with a lease of a few days over 72 years outstanding. Jonathan on an informal basis contacted his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Jonathan to exercise his statutory right. Jonathan obtained expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
In 2009 we were e-mailed by Dr Leo Watson who, having acquired a studio flat in Paignton in June 1999. The question was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in Paignton with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £45 invoiced every twelve months. The lease ran out on 5 July 2098. Considering the 72 years unexpired we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including costs.
Mrs Jennifer White purchased a purpose-built apartment in Paignton in June 2005. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Comparative flats in Paignton with a long lease were worth £233,200. The average amount of ground rent was £60 collected every twelve months. The lease ran out on 6 April 2087. Considering the 61 years left we estimated the premium to the freeholder for the lease extension to be between £22,800 and £26,400 plus legals.