Tutbury leases on residential properties are gradually decreasing in 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. Most owners of residential leasehold property in Tutbury enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Tutbury you really ought to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Tutbury with more than 100 years left 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 circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you better control over the value of your Tutbury leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy correspondence with the freeholder of her garden flat in Tutbury, Imogen started the lease extension process just as the lease was approaching the crucial 80-year deadline. The lease extension was concluded in November 2009. The landlord’s charges were kept to an absolute minimum.
Last Winter we were e-mailed by Dr Jamie Davis , who was assigned a lease of a purpose-built apartment in Tutbury in June 2001. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by 90 years. Identical homes in Tutbury with 100 year plus lease were valued about £193,400. The average ground rent payable was £65 collected annually. The lease termination date was on 18 April 2084. Having 59 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £21,900 and £25,200 not including expenses.
Last Summer we were phoned by Dr Leon Gray , who acquired a ground floor flat in Tutbury in September 2008. We are asked if we could estimate the price would likely be to prolong the lease by a further 90 years. Comparable homes in Tutbury with an extended lease were valued around £255,000. The average amount of ground rent was £50 collected quarterly. The lease terminated on 13 January 2095. Given that there were 70 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £10,500 and £12,000 plus legals.