When it comes to domestic leasehold property in Totnes, you are actually buying a right to live in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive particularly when there are fewer than 80 years remaining. Residents in Totnes with a lease approaching 81 years remaining should seriously consider extending it sooner rather than later. Once a lease has under eighty years left, under the current statute the freeholder is entitled to calculate and demand a larger premium, assessed on a technical multiplication, known as “marriage value” which is payable.
It is generally accepted that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you increased control over the value of your Totnes leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Andrew, came critically near to the 80-year threshold with the lease on his studio flat in Totnes. Having bought his home 19 years previously, the length of the lease was of minimal concern. Luckily, he recognised he needed to take steps soon on a lease extension. Andrew arranged for a lease extension just under the wire last August. Andrew and the landlord who owned the flat above ultimately agreed on a premium of £5,500 . If he not met the deadline, the figure would have increased by at least £1,125.
In 2012 we were called by Mr and Mrs. O Allen who, having moved into a recently refurbished apartment in Totnes in January 2004. The dilemma was if we could approximate the premium would be to extend the lease by a further 90 years. Comparable residencies in Totnes with an extended lease were worth £250,000. The average amount of ground rent was £50 invoiced monthly. The lease finished in 2094. Considering the 68 years unexpired we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of expenses.
In 2012 we were called by Mr and Mrs. M Thompson who, having completed a garden flat in Totnes in July 1999. The dilemma was if we could approximate the premium could be for a 90 year extension to my lease. Comparable flats in Totnes with a long lease were valued around £285,000. The mid-range amount of ground rent was £55 billed per annum. The lease terminated on 8 August 2105. Taking into account 79 years remaining we calculated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including fees.