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 your lease gets more expensive. Most owners of residential leasehold property in Totnes enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Totnes you should see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Totnes,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Totnes valuers.
Subsequent to lengthy negotiations with the landlord of her leasehold flat in Totnes, Ellen initiated the lease extension process as the 80 year mark was fast advancing. The lease extension was finalised in November 2009. The landlord’s charges were kept to an absolute minimum.
Last year we were e-mailed by Mr and Mrs. E Sánchez , who owned a basement apartment in Totnes in March 2009. The dilemma was if we could estimate the premium would likely be for a ninety year lease extension. Comparative homes in Totnes with an extended lease were worth £260,000. The average ground rent payable was £50 billed monthly. The lease termination date was in 2097. Given that there were 72 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including costs.
Mr and Mrs. T Martínez moved into a basement apartment in Totnes in April 2000. We are asked if we could approximate the price would be for a ninety year extension to my lease. Similar properties in Totnes with an extended lease were worth £256,600. The mid-range amount of ground rent was £60 collected yearly. The lease ended on 26 April 2077. Taking into account 52 years remaining we calculated the compensation to the freeholder for the lease extension to be within £41,800 and £48,400 not including costs.