Totnes leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Totnes residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Totnes you should investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Totnes with more than 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Using our service gives you increased control over the value of your Totnes leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Tyler was the the leasehold owner of a 2 bedroom apartment in Totnes on the market with a lease of just over 59 years outstanding. Tyler informally contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Tyler to exercise his statutory right. Tyler procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Dr Rory Roux owned a garden flat in Totnes in August 2003. The question was if we could approximate the price could be to extend the lease by an additional years. Identical premises in Totnes with 100 year plus lease were in the region of £250,000. The average ground rent payable was £50 invoiced yearly. The lease expired in 2094. Taking into account 69 years remaining we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.
In 2010 we were approached by Mrs D Alexander who, having was assigned a lease of a one bedroom apartment in Totnes in March 2001. We are asked if we could estimate the premium would likely be to extend the lease by ninety years. Identical flats in Totnes with an extended lease were in the region of £285,000. The average amount of ground rent was £55 invoiced monthly. The lease came to a finish in 2105. Having 80 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including expenses.