Barnstaple leases on residential properties are gradually diminishing in 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. It is the case that most Barnstaple tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Barnstaple you really ought to check if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Barnstaple,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Barnstaple valuers.
Following protracted discussions with the freeholder of her first floor flat in Barnstaple, Ella commenced the lease extension process as the eighty year mark was fast approaching. The lease extension was finalised in May 2007. The landlord’s costs were kept to an absolute minimum.
In 2013 we were called by Mr K Lambert who, having bought a recently refurbished apartment in Barnstaple in November 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by an additional years. Comparable homes in Barnstaple with 100 year plus lease were valued around £246,800. The mid-range ground rent payable was £60 invoiced quarterly. The lease came to a finish in 2075. Given that there were 50 years as a residual term we calculated the premium to the landlord for the lease extension to be between £44,700 and £51,600 exclusive of costs.
In 2009 we were contacted by Dr Samuel Murphy who, having owned a basement apartment in Barnstaple in March 1997. We are asked if we could approximate the premium could be to extend the lease by 90 years. Identical premises in Barnstaple with an extended lease were worth £208,200. The average amount of ground rent was £65 collected every twelve months. The lease ended on 6 February 2086. Having 61 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 not including professional charges.