Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Plymouth. Inevitably, the term of lease remaining shortens over time. This may pass by relatively unnoticed when the residence needs to be sold or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Eligible leaseholders in Plymouth have the right to extend the lease for an additional ninety years in accordance with legislation. Do give due deliberation before delaying your Plymouth lease extension. Holding off the cost now only increases the price you will eventually incur for a lease extension
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date 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. |
| 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 |
Irrespective of whether you are a tenant or a freeholder in Plymouth,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 in-depth market knowledge and the close ties they enjoy with Plymouth valuers.
Theo owned a high value flat in Plymouth being marketed with a lease of just over 59 years left. Theo on an informal basis 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 extend the lease to 125 years on the basis of an increased rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Theo to invoke his statutory right. Theo procured expert legal guidance and secured satisfactory resolution informally and readily saleable.
Mr Milo Wood bought a ground floor apartment in Plymouth in September 2011. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by ninety years. Similar properties in Plymouth with an extended lease were worth £267,600. The mid-range ground rent payable was £65 collected annually. The lease ended in 2092. Having 67 years left we calculated the compensation to the landlord to extend the lease to be within £14,300 and £16,400 exclusive of legals.
Last Winter we were contacted by Mr and Mrs. L Thomas , who moved into a ground floor flat in Plymouth in August 2000. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Identical properties in Plymouth with 100 year plus lease were valued around £201,200. The mid-range amount of ground rent was £55 billed monthly. The lease termination date was on 17 November 2081. Given that there were 56 years remaining we estimated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 plus professional charges.