Owning a apartment usually means owning a lease of the property, which has a finite term of years. your lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Honiton. Clearly, the length of lease remaining reduces over time. This is often overlooked and only raises itself as an issue when the residence has to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more it will cost to extend the lease. Eligible long lease owners in Honiton have the legal entitlement to extend the lease for an additional ninety years under Leasehold Reform legislation. Do give due deliberation before delaying your Honiton lease extension. Putting off that expense now likely increases the price you will eventually incur to extend your lease
Leasehold properties in Honiton with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Honiton,the lease extension solicitors 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 Honiton valuers.
Leon was the the leasehold proprietor of a high value flat in Honiton on the market with a lease of just over 72 years outstanding. Leon informally approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 yearly. Ordinarily, ground rent would not be payable on a lease extension were Leon to exercise his statutory right. Leon procured expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the flat.
Last year we were approach by Mr G Wright , who took over the lease of a ground floor flat in Honiton in September 2007. We are asked if we could estimate the price would be for a 90 year lease extension. Similar premises in Honiton with a long lease were valued around £295,000. The mid-range ground rent payable was £50 collected per annum. The lease expiry date was on 2 January 2100. Taking into account 75 years remaining we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus fees.
In 2009 we were phoned by Mr and Mrs. Y Dupont who, having bought a studio flat in Honiton in October 2006. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparative premises in Honiton with a long lease were worth £250,400. The average ground rent payable was £65 invoiced every twelve months. The lease came to a finish on 23 October 2089. Given that there were 64 years remaining we estimated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 not including professional charges.