Honiton leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Honiton tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Honiton you should investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Honiton,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 Honiton valuers.
Off the back of lengthy negotiations with the landlord of her first floor flat in Honiton, Lauren started the lease extension process as the eighty year threshold was quickly approaching. The legal work was finalised in September 2005. The landlord’s costs were restricted to slightly above 650 pounds.
Last Autumn we were called by Mr E López , who was assigned a lease of a recently refurbished apartment in Honiton in January 1998. The question was if we could approximate the price would likely be for a ninety year lease extension. Similar residencies in Honiton with 100 year plus lease were worth £174,200. The mid-range amount of ground rent was £55 billed every twelve months. The lease elapsed on 18 August 2076. Given that there were 51 years remaining we approximated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of professional charges.
Last Autumn we were contacted by Mr Joseph Jones , who bought a basement flat in Honiton in August 2010. The dilemma was if we could shed any light on how much (approximately) price could be for a ninety year extension to my lease. Comparative residencies in Honiton with 100 year plus lease were valued around £285,000. The average ground rent payable was £45 invoiced per annum. The lease ended in 2096. Given that there were 71 years remaining we approximated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of professional charges.