It’s a harsh truth that a North Plymouth residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the North Plymouth property market.Where your lease has approximately 90 years left, you should start considering a lease extension. If the number of years remaining dips below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in North Plymouth will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the process.
Leasehold properties in North Plymouth with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| 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; |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in North Plymouth,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with North Plymouth valuers.
Milo owned a studio apartment in North Plymouth on the market with a lease of a little over 72 years outstanding. Milo on an informal basis contacted his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 per annum. No ground rent would be payable on a lease extension were Milo to invoke his statutory right. Milo procured expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
In 2012 we were contacted by Mrs Morgan Miller who, having was assigned a lease of a first floor flat in North Plymouth in February 2003. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Identical flats in North Plymouth with a long lease were worth £216,000. The mid-range amount of ground rent was £60 collected annually. The lease elapsed on 10 May 2084. Taking into account 58 years outstanding we estimated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 plus expenses.
In 2011 we were called by Dr G King who, having moved into a one bedroom apartment in North Plymouth in May 1998. The dilemma was if we could approximate the price would be for a 90 year extension to my lease. Comparable homes in North Plymouth with a long lease were worth £200,000. The average ground rent payable was £50 invoiced annually. The lease ended on 21 April 2104. Considering the 78 years outstanding we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including legals.