Callington leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Callington 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 Callington you would be well advised to investigate if your lease has between 70 and ninety years left. There are good reasons why a Callington flat owner with a lease having around eighty years unexpired should take steps to ensure that a lease extension is put in place without delay
Leasehold properties in Callington with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
The conveyancers that we work with procure Callington 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 conveyancer we work with provide it.
Jack was the the leasehold owner of a 2 bedroom flat in Callington being marketed with a lease of a little over fifty eight years outstanding. Jack on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Jack to exercise his statutory right. Jack obtained expert legal guidance and secured an acceptable deal informally and sell the flat.
In 2011 we were called by Mr and Mrs. V Moore who, having took over the lease of a purpose-built flat in Callington in June 2002. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparable residencies in Callington with a long lease were in the region of £189,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease expired on 13 January 2079. Taking into account 53 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 not including expenses.
Last year we were e-mailed by Mr and Mrs. S Murphy , who moved into a purpose-built apartment in Callington in September 2006. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Similar residencies in Callington with 100 year plus lease were in the region of £290,000. The average ground rent payable was £45 collected yearly. The lease concluded in 2099. Considering the 73 years left we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including expenses.