Unfortunately that a North Plymouth residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the North Plymouth property market.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher premium will be due. The majority of flat owners in North Plymouth will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure North Plymouth 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 lawyer we work with provide it.
Subsequent to unsuccessful discussions with the freeholder of her garden flat in North Plymouth, Sophia started the lease extension process as the eighty year threshold was quickly nearing. The legal work was finalised in July 2011. The landlord’s fees were kept to an absolute minimum.
In 2012 we were contacted by Mrs Alisha Ramírez who, having purchased a ground floor flat in North Plymouth in September 1996. We are asked if we could approximate the premium would be to prolong the lease by an additional years. Comparable flats in North Plymouth with 100 year plus lease were in the region of £257,800. The average ground rent payable was £65 billed annually. The lease came to a finish in 2091. Given that there were 65 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £18,100 and £20,800 not including costs.
Last month we were approach by Dr G White , who purchased a recently refurbished apartment in North Plymouth in August 2002. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Similar flats in North Plymouth with 100 year plus lease were in the region of £191,400. The mid-range amount of ground rent was £55 invoiced monthly. The lease lapsed in 2080. Considering the 54 years left we approximated the premium to the landlord to extend the lease to be between £34,200 and £39,600 exclusive of costs.