It’s a harsh certainty that a Okehampton residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Okehampton property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term falls below eighty years, you will then be required to pay 50% 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 extra value that a lease extension will add the property Most leasehold owners in Okehampton will be able to extend under the legislation; however a lawyer should be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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 |
Using our service gives you better control over the value of your Okehampton leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Blake was the the leasehold proprietor of a high value apartment in Okehampton on the market with a lease of a little over sixty years unexpired. Blake on an informal basis spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Blake to invoke his statutory right. Blake obtained expert legal guidance and secured an acceptable resolution without going to tribunal and sell the flat.
Mrs S Roux bought a garden flat in Okehampton in July 2008. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by an additional years. Comparable premises in Okehampton with 100 year plus lease were valued about £227,800. The average amount of ground rent was £45 collected per annum. The lease ran out on 9 March 2089. Taking into account 65 years left we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus fees.
Last Spring we were approach by Dr I Edwards , who completed a one bedroom flat in Okehampton in September 1995. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by a further 90 years. Comparable residencies in Okehampton with 100 year plus lease were worth £270,000. The mid-range ground rent payable was £55 billed monthly. The lease terminated on 25 July 2100. Taking into account 76 years remaining we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of costs.