Torpoint leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Torpoint enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Torpoint you would be well advised to investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold properties in Torpoint with over one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Lease extensions in Torpoint can be a difficult process. We recommend you obtain guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Torpoint lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Tommy was the the leasehold proprietor of a studio apartment in Torpoint on the market with a lease of just over sixty years unexpired. Tommy on an informal basis approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Tommy to invoke his statutory right. Tommy obtained expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2009 we were approached by Mr E Thomas who, having took over the lease of a studio flat in Torpoint in June 1998. The dilemma was if we could estimate the price would be to extend the lease by a further 90 years. Comparable homes in Torpoint with a long lease were worth £189,000. The average amount of ground rent was £55 collected monthly. The lease came to a finish in 2079. Taking into account 53 years remaining we approximated the premium to the landlord for the lease extension to be within £28,500 and £33,000 exclusive of costs.
Last year we were approach by Mr Alex Nguyen , who took over the lease of a ground floor flat in Torpoint in January 2007. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by a further 90 years. Similar flats in Torpoint with 100 year plus lease were worth £290,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease ran out in 2099. Considering the 73 years left we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including fees.