Yelverton 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. The majority of owners of residential leasehold property in Yelverton enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Yelverton you really ought to investigate if your lease has between seventy and ninety years left. There are compelling reasons why a Yelverton leaseholder with a lease having around eighty years left should take action to make sure that a lease extension is effected without delay
Leasehold residencies in Yelverton with more than 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
The lawyers that we work with procure Yelverton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Two years ago Jack, started to get close to the eighty-year mark with the lease on his two bedroom apartment in Yelverton. In buying his home two decades ago, the unexpired term was of little interest. Luckily, he became aware that he needed to take action soon on a lease extension. Jack extended the lease just ahead of time in April. Jack and the landlord subsequently agreed on a premium of £5,500 . If the lease had dropped below eighty years, the price would have increased by at least £1,150.
Last Autumn we were called by Mr and Mrs. L Phillips , who took over the lease of a purpose-built flat in Yelverton in September 1996. The dilemma was if we could estimate the premium would be for a 90 year lease extension. Comparative flats in Yelverton with a long lease were valued about £275,000. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease concluded in 2094. Taking into account 69 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of fees.
Mr K Johnson took over the lease of a newly refurbished flat in Yelverton in June 1998. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by a further 90 years. Similar homes in Yelverton with a long lease were valued about £216,000. The mid-range ground rent payable was £60 billed every twelve months. The lease end date was on 14 February 2083. Considering the 58 years outstanding we calculated the premium to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of fees.