There is no doubt about it a leasehold property in Devizes is a wasting asset as a result of the shortening lease. If the lease has, beyond one hundred years to run then this decrease may be negligible however there will become a stage when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary reason why you should extend the lease sooner rather than later. Most flat owners in Devizes will qualify for this right; that being said a lawyer can confirm whether you qualify to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancing solicitors that we work with procure Devizes 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 lawyer we work with provide it.
Jason owned a conversion flat in Devizes being sold with a lease of fraction over 59 years unexpired. Jason on an informal basis spoke with his landlord 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 on the basis of a new rent initially set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jason to invoke his statutory right. Jason procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Mr Evan Simon took over the lease of a one bedroom flat in Devizes in March 1995. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Comparable flats in Devizes with 100 year plus lease were worth £168,800. The average ground rent payable was £60 invoiced quarterly. The lease concluded on 23 August 2081. Having 55 years outstanding we estimated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 not including professional charges.
Last Christmas we were called by Dr U Roberts , who acquired a purpose-built apartment in Devizes in August 2004. We are asked if we could approximate the premium could be to prolong the lease by ninety years. Identical properties in Devizes with an extended lease were valued about £235,200. The average ground rent payable was £45 billed every twelve months. The lease elapsed in 2092. Given that there were 66 years unexpired we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus fees.