The market value of a leasehold property in Teignmouth depends on how long the lease has remaining. If it is near to or less than eighty years you should expect difficulties on re-sale, so it is advisable to arrange for a lease extension before purchasing. Ideally one should start the process of extending the lease is when the lease still has 82 years to run so that a lease extension can be finalised well before the eighty year cut off point. Statute entitles Teignmouth qualifying lessees to acquire a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you enhanced control over the value of your Teignmouth leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Sam was the the leasehold owner of a conversion apartment in Teignmouth being sold with a lease of fraction over 59 years left. Sam on an informal basis approached his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Sam to invoke his statutory right. Sam procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
In 2012 we were contacted by Dr S Ricardo who, having moved into a one bedroom apartment in Teignmouth in March 2002. We are asked if we could approximate the premium could be to extend the lease by an additional years. Comparative premises in Teignmouth with a long lease were valued about £174,200. The mid-range amount of ground rent was £55 billed per annum. The lease ran out on 11 February 2076. Taking into account 51 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 not including fees.
In 2009 we were contacted by Mr Alexander Sánchez who, having moved into a purpose-built apartment in Teignmouth in February 1997. The question was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Comparable properties in Teignmouth with an extended lease were in the region of £285,000. The mid-range ground rent payable was £45 collected per annum. The lease ran out on 23 April 2096. Given that there were 71 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 not including costs.