Crediton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Crediton tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Crediton you really ought to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Crediton with over one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| 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. |
| Bank of Scotland | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Crediton,the lease extension lawyers 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 Crediton valuers.
In the wake of 9 months of protracted discussions with the landlord of her purpose-built flat in Crediton, Molly started the lease extension process as the 80 year threshold was swiftly nearing. The transaction was concluded in November 2010. The landlord’s charges were kept to an absolute minimum.
In 2011 we were contacted by Mr and Mrs. G Peterson who, having bought a basement apartment in Crediton in March 1995. The question was if we could estimate the premium would be to prolong the lease by an additional years. Identical premises in Crediton with a long lease were in the region of £254,200. The mid-range ground rent payable was £60 invoiced per annum. The lease expiry date was on 19 October 2076. Given that there were 51 years remaining we estimated the premium to the landlord to extend the lease to be within £43,700 and £50,600 not including costs.
In 2009 we were contacted by Mr Liam Mason who, having was assigned a lease of a basement apartment in Crediton in March 2005. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by a further 90 years. Similar flats in Crediton with a long lease were worth £210,600. The mid-range amount of ground rent was £45 billed yearly. The lease expiry date was on 17 March 2087. Considering the 62 years unexpired we calculated the premium to the landlord to extend the lease to be between £18,100 and £20,800 not including costs.