Unfortunately that a Teignmouth residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Teignmouth property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining drops under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Teignmouth will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer for the duration of the formalities.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Teignmouth,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Teignmouth valuers.
Kian owned a 2 bedroom flat in Teignmouth on the market with a lease of fraction over fifty eight years left. Kian informally spoke with his landlord being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £200 annually. No ground rent would be due on a lease extension were Kian to exercise his statutory right. Kian procured expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
Mr and Mrs. E Bertrand owned a ground floor apartment in Teignmouth in August 2005. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical premises in Teignmouth with an extended lease were in the region of £280,000. The average amount of ground rent was £45 collected every twelve months. The lease concluded on 22 July 2097. Taking into account 71 years outstanding we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus fees.
In 2010 we were phoned by Dr Hugo Walker who, having bought a basement apartment in Teignmouth in March 2002. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Similar homes in Teignmouth with a long lease were worth £225,800. The mid-range amount of ground rent was £60 billed every twelve months. The lease expired in 2086. Given that there were 60 years left we estimated the premium to the freeholder for the lease extension to be between £25,700 and £29,600 not including legals.