Tavistock leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Tavistock tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Tavistock you would be well advised to see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Tavistock with over 100 years left 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 purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
The lawyers that we work with undertake Tavistock 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.
Two years ago Jamie, came critically near to the eighty-year mark with the lease on his studio apartment in Tavistock. In buying his home twenty years previously, the lease term was of no importance. by good luck, he realised he needed to take action soon on a lease extension. Jamie extended the lease just under the wire last September. Jamie and the landlord ultimately agreed on the final figure of £5,500 . If the lease had dropped to less than 80 years, the figure would have escalated by at least £1,025.
In 2011 we were phoned by Mr C Taylor who, having completed a ground floor flat in Tavistock in September 2000. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Comparative properties in Tavistock with a long lease were worth £215,600. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease ran out in 2087. Given that there were 62 years left we calculated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 plus legals.
In 2011 we were e-mailed by Mr and Mrs. T Brooks who, having purchased a studio apartment in Tavistock in March 2000. We are asked if we could shed any light on how much (approximately) price could be to prolong the lease by an additional years. Comparative properties in Tavistock with a long lease were in the region of £265,000. The mid-range amount of ground rent was £50 billed per annum. The lease concluded on 4 February 2098. Taking into account 73 years left we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including fees.