If you are facing a significant premium because your lease in Torpoint has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to commence your Torpoint lease extension today:
Increase your lease and increase your Torpoint property value
The market value of a leasehold property in Torpoint is impacted by how long the lease has remaining. If it is close to or fewer than 80 years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that all matters can be finalised in advance of the eighty year cut off point. Leasehold Reform legislation enables Torpoint qualifying lessees to an additional term of 90 years over and above the unexpired term, at a peppercorn rent (zero ground rent). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Torpoint property with a lease extension is almost the same value as a freehold
Leasehold properties in Torpoint with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges justify it.
Lending institutions may decide not to lend on a short lease
Most mortgage lenders have narrowed their lending criteria in the last ten years and borrowers are encountering difficulties in arranging funding or re-mortgage against flats with shorter lease terms, particularly under seventy years as they are deemed to be unacceptable for lending purposes.
| Lender |
Requirement
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|---|
| Barnsley Building Society |
60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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| Leeds Building Society |
85 years remaining from the start of the mortgage.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
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| 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.
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What makes us experts in Torpoint lease extensions?
Engaging our service will provide you better control over the value of your Torpoint leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell.
The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Torpoint Lease Extension Case Studies:
Dylan, Torpoint, Cornwall,
Dylan was the the leasehold proprietor of a 2 bedroom apartment in Torpoint being marketed with a lease of just over 72 years outstanding. Dylan informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Dylan to invoke his statutory right. Dylan procured expert legal guidance and secured an acceptable deal without resorting to tribunal and sell the flat.
Torpoint case:
Last month we were called by Mr and Mrs. U Norbert , who
moved into a purpose-built apartment in Torpoint in March 2008. The question was if we could approximate the premium could be for a ninety year lease extension. Comparable premises in Torpoint with a long lease were in the region of £295,000. The average amount of ground rent was £45 collected per annum. The lease terminated on 28 November 2100. Given that there were 74 years left we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including legals.
Torpoint case:
In 2014 we were called by Mr and Mrs. D Bertrand who, having was assigned a lease of a ground floor apartment in Torpoint in February 2004. We are asked if we could estimate the price would likely be to prolong the lease by an additional years. Similar homes in Torpoint with an extended lease were worth £243,000. The mid-range ground rent payable was £65 invoiced monthly. The lease termination date was in 2089. Having 63 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £20,000 and £23,000 exclusive of fees.