Unfortunately that a Bovey Tracey residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Bovey Tracey property market.Where your lease has approximately ninety years left, you need to start thinking about 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 dips under eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Bovey Tracey will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold properties in Bovey Tracey with more than 100 years remaining 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 premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Bovey Tracey,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bovey Tracey valuers.
In the wake of 9 months of lengthy correspondence with the landlord of her first floor flat in Bovey Tracey, Eleanor commenced the lease extension process just as the lease was approaching the critical eighty-year mark. The legal work was concluded in February 2007. The landlord’s costs were negotiated to approximately 450 pounds.
In 2012 we were contacted by Mr M Lambert who, having completed a newly refurbished flat in Bovey Tracey in October 1995. The dilemma was if we could shed any light on how much (roughly) price could be to extend the lease by 90 years. Comparable premises in Bovey Tracey with 100 year plus lease were valued about £193,400. The average amount of ground rent was £65 invoiced monthly. The lease elapsed in 2085. Taking into account 59 years remaining we calculated the premium to the freeholder to extend the lease to be within £21,900 and £25,200 exclusive of fees.
Mrs Leah Moreau moved into a one bedroom apartment in Bovey Tracey in October 2011. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Similar homes in Bovey Tracey with 100 year plus lease were in the region of £255,000. The average amount of ground rent was £50 billed yearly. The lease terminated in 2096. Considering the 70 years unexpired we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of expenses.