Unfortunately that a Torpoint residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation 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 lower than 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Torpoint will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors 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.
In recent months Jamie, came dangerously near to the eighty-year mark with the lease on his one bedroom flat in Torpoint. Having bought his home two decades ago, the length of the lease was of no importance. Thankfully, he realised he needed to take steps soon on Extending the lease. Jamie was able to extend his lease just under the wire last April. Jamie and the landlord who owned the flat above subsequently settled on a premium of £5,000 . If he had missed the deadline, the figure would have escalated by at least £1,100.
In 2009 we were approached by Dr N Nguyen who, having bought a basement flat in Torpoint in September 2007. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable residencies in Torpoint with an extended lease were valued about £250,400. The average amount of ground rent was £65 invoiced yearly. The lease concluded on 9 July 2090. Having 64 years unexpired we estimated the premium to the landlord for the lease extension to be between £19,000 and £22,000 not including expenses.
Last Summer we were approach by Ms O David , who was assigned a lease of a one bedroom apartment in Torpoint in April 1998. We are asked if we could approximate the price would be to extend the lease by an additional years. Similar premises in Torpoint with 100 year plus lease were valued around £189,000. The average ground rent payable was £55 billed monthly. The lease expired on 6 April 2079. Given that there were 53 years as a residual term we approximated the premium to the landlord for the lease extension to be between £28,500 and £33,000 plus legals.