The re-sale value of a leasehold property in Honiton depends on how long the lease has remaining. If it is near to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. Ideally one should start the lease extension process when a lease still has 82 years to run so that a lease extension can be finalised prior to the 80 year cut off point. Current legislation entitles Honiton qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of ninety years. The reason of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Honiton with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea Building Society | 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. |
| 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. |
Lease extensions in Honiton can be a difficult process. We recommend you secure professional help from a conveyancing solicitor and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Honiton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
John was the the leasehold proprietor of a conversion apartment in Honiton on the market with a lease of a little over 61 years left. John informally approached his freeholder being a well known Manchester-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 an increased rent to £100 per annum. Ordinarily, ground rent would not be due on a lease extension were John to exercise his statutory right. John obtained expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
In 2014 we were contacted by Mr and Mrs. H Rose who, having completed a one bedroom flat in Honiton in April 1999. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by ninety years. Comparable properties in Honiton with an extended lease were worth £223,400. The mid-range ground rent payable was £60 invoiced yearly. The lease termination date was on 11 May 2084. Considering the 59 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £27,600 and £31,800 plus fees.
Last year we were phoned by Mrs Morgan Gunderson , who completed a one bedroom apartment in Honiton in May 2003. The dilemma was if we could shed any light on how much (approximately) price would likely be to prolong the lease by 90 years. Comparable properties in Honiton with an extended lease were in the region of £205,000. The average ground rent payable was £50 collected monthly. The lease finished on 26 September 2104. Having 79 years left we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including expenses.