The basic rule is, all other factors being equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Plymouth have the right to extend the lease for an additional ninety years in accordance with legislation. Please give careful consideration before delaying your Plymouth lease extension. Putting off that expense now simply increases the amount you will eventually have to pay for a lease extension.
Leasehold properties in Plymouth with more than 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle 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.
Dexter owned a studio apartment in Plymouth on the market with a lease of just over sixty years remaining. Dexter informally spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Dexter to invoke his statutory right. Dexter procured expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Mr and Mrs. U Brooks owned a first floor apartment in Plymouth in January 2012. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparative homes in Plymouth with a long lease were valued around £225,800. The average amount of ground rent was £60 collected quarterly. The lease lapsed in 2085. Given that there were 60 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £25,700 and £29,600 not including professional charges.
In 2009 we were approached by Dr Katie Lambert who, having completed a one bedroom flat in Plymouth in February 1996. The question was if we could estimate the premium could be for a ninety year extension to my lease. Identical properties in Plymouth with an extended lease were valued around £210,000. The average amount of ground rent was £50 collected quarterly. The lease ran out on 10 August 2105. Taking into account 80 years unexpired we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.