Honiton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Honiton residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Honiton you must investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Honiton with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancers that we work with handle 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.
Harry was the the leasehold owner of a 2 bedroom flat in Honiton being sold with a lease of a few days over 72 years remaining. Harry informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £200 annually. No ground rent would be due on a lease extension were Harry to invoke his statutory right. Harry procured expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Mr and Mrs. K Parker owned a first floor apartment in Honiton in November 2009. The question was if we could approximate the premium would be to prolong the lease by ninety years. Identical flats in Honiton with a long lease were in the region of £250,400. The mid-range ground rent payable was £65 collected yearly. The lease lapsed on 2 October 2090. Taking into account 64 years remaining we approximated the compensation to the landlord to extend the lease to be between £19,000 and £22,000 exclusive of expenses.
In 2013 we were called by Mrs Lily Alexander who, having took over the lease of a newly refurbished flat in Honiton in June 1996. We are asked if we could estimate the compensation to the landlord would be to extend the lease by 90 years. Comparable flats in Honiton with an extended lease were worth £189,000. The mid-range ground rent payable was £55 invoiced per annum. The lease ran out on 12 April 2079. Considering the 53 years unexpired we calculated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 not including professional charges.