Paignton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Paignton enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Paignton you must check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Paignton with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a landlord in Paignton,the lease extension lawyers 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.
In 2014 Samuel, started to get close to the eighty-year mark with the lease on his first floor apartment in Paignton. Having purchased his flat twenty years previously, the length of the lease was of no significance. by good luck, he became aware that he would imminently be paying way over the odds for Extending the lease. Samuel extended the lease just under the wire in June. Samuel and the landlord who owned the flat above subsequently settled on sum of £6,000 . If the lease had descended to less than 80 years, the figure would have escalated by at least £1,150.
Mrs Victoria Ricardo purchased a one bedroom flat in Paignton in August 2002. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Identical flats in Paignton with a long lease were in the region of £233,200. The average ground rent payable was £60 collected per annum. The lease terminated on 24 April 2087. Considering the 61 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £22,800 and £26,400 plus legals.
In 2010 we were called by Mrs S Lewis who, having moved into a one bedroom flat in Paignton in June 1995. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Identical residencies in Paignton with an extended lease were worth £166,800. The mid-range ground rent payable was £50 invoiced yearly. The lease elapsed on 28 February 2076. Given that there were 50 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 exclusive of costs.