With a residential leasehold premises in Honiton, you are actually buying a right to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive particularly once there are fewer than eighty years left. Anyone in Honiton with a lease approaching 81 years unexpired should seriously consider extending it without delay. When the lease term has less than eighty years remaining, under the current statute the freeholder is entitled to calculate and levy a greater amount, based on a technical computation, known as “marriage value” which is payable.
Leasehold premises in Honiton with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest 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 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; |
| Coventry Building Society | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you enhanced control over the value of your Honiton leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last year Arthur, started to get close to the 80-year threshold with the lease on his leasehold apartment in Honiton. In buying his home two decades ago, the unexpired term was of no relevance. Luckily, he recognised he needed to take steps soon on a lease extension. Arthur arranged for a lease extension just under the wire in January. Arthur and the freeholder eventually agreed on the final figure of £5,500 . If he had missed the deadline, the sum would have become more exhorbitant by a minimum £1,125.
Ms R Thompson took over the lease of a garden apartment in Honiton in July 2008. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparable residencies in Honiton with a long lease were worth £240,600. The average ground rent payable was £60 collected quarterly. The lease concluded in 2087. Having 62 years left we calculated the premium to the freeholder for the lease extension to be between £21,900 and £25,200 exclusive of professional charges.
Last month we were approach by Mrs Chantelle Khan , who took over the lease of a studio apartment in Honiton in September 2001. The dilemma was if we could estimate the price would likely be for a ninety year lease extension. Comparative residencies in Honiton with an extended lease were worth £174,200. The mid-range ground rent payable was £55 invoiced monthly. The lease finished in 2076. Having 51 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 plus professional charges.