When it comes to domestic leasehold property in Tavistock, you are actually buying a right to live in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive particularly when there are less than 80 years left. Residents in Tavistock with a lease approaching 81 years unexpired should seriously consider extending it without delay. Once the lease term has below eighty years outstanding, under the current legislation the landlord is entitled to calculate and levy a greater premium, based on a technical computation, known as “marriage value” which is payable.
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Godiva Mortgages | 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. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Tavistock leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Muhammad owned a studio apartment in Tavistock being sold with a lease of just over 72 years outstanding. Muhammad informally contacted his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Muhammad to invoke his statutory right. Muhammad procured expert advice and was able to make a more informed judgement and handle with the matter and sell the property.
Last Autumn we were contacted by Mr Finn Stewart , who was assigned a lease of a basement flat in Tavistock in May 2005. We are asked if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Identical flats in Tavistock with a long lease were in the region of £246,800. The average ground rent payable was £60 billed annually. The lease came to a finish on 27 July 2075. Considering the 50 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £44,700 and £51,600 exclusive of costs.
In 2009 we were approached by Dr Dylan Edwards who, having was assigned a lease of a basement flat in Tavistock in September 2002. The dilemma was if we could estimate the premium could be for a 90 year lease extension. Similar residencies in Tavistock with a long lease were valued about £208,200. The mid-range ground rent payable was £65 collected per annum. The lease terminated in 2086. Given that there were 61 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £20,000 and £23,000 not including professional charges.