Salcombe residential property held on a long lease is a wasting asset because a leaseholder merely owns the property for a period of years.
It is generally considered that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Salcombe,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Salcombe valuers.
Henry owned a studio flat in Salcombe on the market with a lease of fraction over 72 years left. Henry informally approached 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 a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Henry to invoke his statutory right. Henry procured expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2009 we were called by Dr Finley Moreau who, having was assigned a lease of a purpose-built apartment in Salcombe in May 2003. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Identical flats in Salcombe with an extended lease were worth £235,200. The average amount of ground rent was £45 collected per annum. The lease concluded on 14 November 2091. Given that there were 66 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including expenses.
Dr Caleb Davies acquired a ground floor apartment in Salcombe in July 2001. The dilemma was if we could approximate the premium could be to extend the lease by a further 90 years. Comparable properties in Salcombe with an extended lease were valued about £280,000. The mid-range ground rent payable was £55 billed monthly. The lease terminated in 2102. Considering the 77 years remaining we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 plus legals.