The value of Torpoint leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the remaining term is less than 80 years
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you better control over the value of your Torpoint leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Harvey owned a 2 bedroom flat in Torpoint being marketed with a lease of just over 61 years left. Harvey on an informal basis approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £200 annually. No ground rent would be payable on a lease extension were Harvey to invoke his statutory right. Harvey obtained expert legal guidance and secured satisfactory deal without going to tribunal and sell the flat.
In 2014 we were approached by Mrs Jodie Williams who, having took over the lease of a basement apartment in Torpoint in September 2004. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Identical properties in Torpoint with 100 year plus lease were worth £181,600. The mid-range ground rent payable was £55 invoiced monthly. The lease came to a finish in 2078. Taking into account 52 years unexpired we calculated the premium to the landlord for the lease extension to be between £30,400 and £35,200 not including expenses.
Last Winter we were contacted by Mr and Mrs. D Kelly , who owned a one bedroom apartment in Torpoint in January 2000. We are asked if we could approximate the price would be to prolong the lease by 90 years. Identical premises in Torpoint with a long lease were valued around £285,000. The average amount of ground rent was £45 collected quarterly. The lease termination date was in 2098. Taking into account 72 years unexpired we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including legals.