The value of Honiton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase materialy once the remaining term is less than 80 years
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the equivalent 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 in the future.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
The lawyers that we work with procure Honiton 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.
Elijah was the the leasehold proprietor of a 2 bedroom apartment in Honiton being marketed with a lease of a few days over sixty years left. Elijah informally approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Elijah to exercise his statutory right. Elijah obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
Ms K Ward completed a basement flat in Honiton in November 2007. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical properties in Honiton with a long lease were in the region of £200,000. The average amount of ground rent was £50 billed annually. The lease ran out in 2103. Considering the 78 years remaining we estimated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus fees.
In 2012 we were approached by Ms Niamh Anderson who, having took over the lease of a first floor flat in Honiton in February 2005. We are asked if we could approximate the price would likely be for a ninety year lease extension. Comparative flats in Honiton with 100 year plus lease were worth £267,600. The mid-range ground rent payable was £65 collected monthly. The lease expired in 2092. Taking into account 67 years outstanding we calculated the premium to the landlord to extend the lease to be between £14,300 and £16,400 exclusive of fees.