Barnstaple 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. The majority of owners of residential leasehold property in Barnstaple enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Barnstaple you should investigate if your lease has between 70 and 90 years left. There are compelling reasons why a Barnstaple leaseholder with a lease having around 80 years remaining should take steps to ensure that a lease extension is effected without delay
Leasehold premises in Barnstaple with more than 100 years outstanding on the lease are often referred to as ‘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 freehold unless savings on ground rent and service charges justify it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with undertake Barnstaple 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 lawyer we work with provide it.
Dexter owned a 2 bedroom apartment in Barnstaple being sold with a lease of a little over 61 years remaining. Dexter on an informal basis approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 per annum. No ground rent would be due on a lease extension were Dexter to exercise his statutory right. Dexter obtained expert legal guidance and secured satisfactory deal informally and ending up with a market value flat.
In 2010 we were e-mailed by Dr Y Ramírez who, having took over the lease of a first floor flat in Barnstaple in July 2009. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Similar residencies in Barnstaple with an extended lease were in the region of £232,800. The average amount of ground rent was £45 invoiced monthly. The lease concluded on 10 January 2090. Taking into account 65 years left we calculated the premium to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of fees.
Last Autumn we were approach by Mr and Mrs. J Mercier , who bought a purpose-built flat in Barnstaple in June 2011. The dilemma was if we could estimate the premium would be for a ninety year extension to my lease. Identical premises in Barnstaple with a long lease were valued about £275,000. The average ground rent payable was £55 collected annually. The lease came to a finish in 2101. Having 76 years unexpired we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of expenses.