Salcombe leases on residential deteriorating in value. if your lease has in the region of ninety years left, you should start thinking about a lease extension. Eighty years is a significant number: when the remaining term of a lease falls below this level then you start paying an additional element called marriage value. Flat owners in Salcombe will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancing solicitor to confirm your eligibility. In some situations you may not qualify. There are prescribed deadlines and procedures to follow once the process has commenced so it’s prudent to be guided by a lawyer during the process.
Leasehold properties in Salcombe with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth 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 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Salcombe 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 lawyer we work with provide it.
Evan owned a conversion flat in Salcombe being sold with a lease of a few days over 59 years unexpired. Evan on an informal basis spoke with his landlord a well known Bristol-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 rise in the rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Evan to exercise his statutory right. Evan procured expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
In 2009 we were approached by Mr and Mrs. F Morel who, having took over the lease of a first floor flat in Salcombe in June 2000. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Similar premises in Salcombe with an extended lease were in the region of £290,000. The mid-range ground rent payable was £60 billed annually. The lease end date was on 6 October 2106. Given that there were 80 years unexpired we calculated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of fees.
Last Spring we were e-mailed by Mr Muhammad Bennett , who moved into a purpose-built apartment in Salcombe in February 2009. We are asked if we could estimate the premium could be for a ninety year lease extension. Comparative premises in Salcombe with an extended lease were in the region of £200,800. The mid-range amount of ground rent was £65 collected quarterly. The lease ran out in 2086. Given that there were 60 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £20,900 and £24,200 plus fees.