Unfortunately that a Torpoint residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Torpoint property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher amount will be due. Most leasehold owners in Torpoint will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire Building Society | 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. |
The conveyancers that we work with procure Torpoint 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.
Off the back of lengthy correspondence with the landlord of her two bedroom flat in Torpoint, Kate started the lease extension process as the 80 year mark was fast advancing. The transaction was concluded in November 2013. The freeholder’s costs were kept to an absolute minimum.
Last Winter we were called by Dr Leo Khan , who acquired a one bedroom flat in Torpoint in October 2004. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Similar properties in Torpoint with 100 year plus lease were valued around £210,000. The mid-range amount of ground rent was £50 collected quarterly. The lease expired in 2106. Considering the 80 years left we calculated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 plus professional charges.
Dr B Martin was assigned a lease of a purpose-built apartment in Torpoint in September 2002. The question was if we could shed any light on how much (approximately) premium would be to extend the lease by ninety years. Comparative residencies in Torpoint with a long lease were worth £275,000. The mid-range ground rent payable was £45 billed quarterly. The lease finished on 7 August 2095. Having 69 years remaining we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including professional charges.