As the the remaining lease term of a Callington domestic lease lessens so does its value and therefore the value of your property. Where the residual term has, in excess of one hundred years remaining then this decrease may be fractional however there will become a stage when a lease has fewer than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main logic behind why you should extend the lease without delay. Most flat owners in Callington will meet the qualifying criteria; nevertheless a conveyancing solicitor should be able to advise if you qualify to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold premises in Callington with over one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Callington,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Callington valuers.
Adam owned a studio apartment in Callington on the market with a lease of fraction over 61 years unexpired. Adam on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Adam to exercise his statutory right. Adam obtained expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
Dr D Walker took over the lease of a studio flat in Callington in January 2002. The question was if we could approximate the price would likely be to extend the lease by 90 years. Similar residencies in Callington with a long lease were valued around £275,000. The average ground rent payable was £65 invoiced every twelve months. The lease terminated on 22 April 2093. Given that there were 68 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus fees.
Last Summer we were e-mailed by Mr and Mrs. S Gray , who bought a studio flat in Callington in July 2002. The dilemma was if we could approximate the premium would be to prolong the lease by 90 years. Comparable flats in Callington with an extended lease were valued about £208,600. The average ground rent payable was £60 invoiced quarterly. The lease lapsed in 2082. Given that there were 57 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of expenses.