Saltash leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Saltash enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Saltash you really ought to investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold residencies in Saltash with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancing solicitors that we work with procure Saltash 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.
During the course of the last few months Connor, started to get close to the eighty-year threshold with the lease on his two bedroom apartment in Saltash. In buying his property twenty years previously, the lease term was of little concern. Luckily, it dawned on him that he would soon be paying way over the odds for a lease extension. Connor was able to extend his lease just under the wire in July. Connor and the landlord in the end settled on the final figure of £5,500 . If the lease had slid to less than 80 years, the amount would have gone up by at least £1,050.
Dr Benjamin Morgan was assigned a lease of a ground floor apartment in Saltash in August 2004. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Comparative flats in Saltash with 100 year plus lease were in the region of £225,800. The mid-range amount of ground rent was £60 billed quarterly. The lease terminated in 2086. Having 60 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 not including fees.
Mr and Mrs. M López completed a one bedroom apartment in Saltash in November 2004. The dilemma was if we could approximate the price would be to prolong the lease by 90 years. Comparative properties in Saltash with a long lease were in the region of £210,000. The mid-range ground rent payable was £50 collected monthly. The lease expiry date was in 2106. Given that there were 80 years outstanding we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus expenses.