The market value of Callington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate substantially once the unexpired lease term is less than eighty years
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for many years ahead.
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Lease extensions in Callington can be a difficult process. We recommend you secure guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Callington lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
John was the the leasehold proprietor of a studio flat in Callington being sold with a lease of a little over 72 years unexpired. John on an informal basis spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were John to invoke his statutory right. John procured expert advice and was able to make a more informed decision and handle with the matter and sell the property.
In 2012 we were e-mailed by Mr and Mrs. P Thomas who, having bought a studio flat in Callington in August 2008. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Similar properties in Callington with an extended lease were in the region of £206,200. The mid-range amount of ground rent was £60 collected yearly. The lease finished in 2081. Given that there were 56 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 plus legals.
Mr and Mrs. P Martin was assigned a lease of a purpose-built apartment in Callington in October 2004. The dilemma was if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Comparable homes in Callington with a long lease were in the region of £300,000. The mid-range amount of ground rent was £50 collected yearly. The lease elapsed in 2101. Having 76 years remaining we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including fees.