There is no doubt about it a leasehold flat or house in Paignton is a wasting asset as a result of the shortening lease. If the lease has, more than 99 years to run then this decrease may be negligible however there will become a point in time when a lease has under than eighty years left as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the main logic behind why you should extend the lease without delay. Many flat owners in Paignton will qualify for this right; however a conveyancer will be able to confirm whether you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the residence will be equivalent in value to 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Paignton,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Paignton valuers.
Edward was the the leasehold proprietor of a conversion apartment in Paignton on the market with a lease of just over 59 years unexpired. Edward informally contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £100 per annum. No ground rent would be payable on a lease extension were Edward to exercise his statutory right. Edward obtained expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
In 2012 we were contacted by Mr K Wood who, having completed a recently refurbished flat in Paignton in May 1995. The question was if we could estimate the price would likely be for a ninety year extension to my lease. Identical premises in Paignton with a long lease were worth £208,600. The average ground rent payable was £60 invoiced every twelve months. The lease elapsed in 2083. Considering the 57 years outstanding we calculated the premium to the landlord for the lease extension to be within £30,400 and £35,200 plus fees.
Last month we were approach by Mr and Mrs. D Smith , who bought a recently refurbished flat in Paignton in November 2008. We are asked if we could shed any light on how much (roughly) price would be for a 90 year lease extension. Comparative premises in Paignton with a long lease were in the region of £200,000. The average amount of ground rent was £50 collected quarterly. The lease elapsed on 3 August 2103. Having 77 years remaining we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus expenses.