Plymouth leases on domestic properties are gradually losing value. Where your lease has in the region of ninety years unexpired, you should start thinking about a lease extension. If lease term falls under 80 years, you will then have to pay 50% of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Plymouth will mostly qualify for a lease extension; however a solicitor will confirm your eligibility. In certain situations you may not qualify. There are also strict deadlines and formalities to comply with once the process is initiated so it’s wise to be guided by a conveyancer during the process.
Leasehold properties in Plymouth with more than one hundred 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 property. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Godiva Mortgages | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake 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 conveyancing solicitor we work with provide it.
Subsequent to lengthy negotiations with the freeholder of her ground floor apartment in Plymouth, Rachel initiated the lease extension process as the 80 year deadline was fast approaching. The transaction completed in October 2007. The landlord’s costs were kept to an absolute minimum.
Last Autumn we were called by Mr and Mrs. E Sánchez , who purchased a one bedroom flat in Plymouth in May 2010. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by an additional years. Identical properties in Plymouth with an extended lease were worth £275,000. The mid-range amount of ground rent was £45 billed yearly. The lease expired on 4 August 2095. Having 69 years as a residual term we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including fees.
In 2011 we were approached by Dr G Gray who, having moved into a basement flat in Plymouth in July 1995. We are asked if we could estimate the price could be for a 90 year lease extension. Similar properties in Plymouth with 100 year plus lease were worth £216,000. The mid-range ground rent payable was £60 billed per annum. The lease expired on 13 November 2084. Having 58 years outstanding we approximated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of expenses.