Ottery St Mary 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 the lease gets more expensive. It is the case that most Ottery St Mary tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Ottery St Mary you really ought to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in Ottery St Mary with more than one hundred years left on the lease are sometimes 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 to be gained by buying the freehold unless savings on ground rent and maintenance 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Ottery St Mary,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Ottery St Mary valuers.
Henry owned a conversion apartment in Ottery St Mary on the market with a lease of a few days over fifty eight years left. Henry informally spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 per annum. No ground rent would be payable on a lease extension were Henry to invoke his statutory right. Henry procured expert legal guidance and secured satisfactory deal without resorting to tribunal and sell the property.
In 2009 we were e-mailed by Dr Jacob Parker who, having took over the lease of a first floor apartment in Ottery St Mary in August 2010. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Comparative homes in Ottery St Mary with a long lease were in the region of £173,800. The average ground rent payable was £60 invoiced per annum. The lease came to a finish on 28 April 2080. Given that there were 55 years remaining we estimated the compensation to the landlord to extend the lease to be between £31,400 and £36,200 not including professional charges.
Last Christmas we were approach by Mr and Mrs. D Scott , who owned a purpose-built apartment in Ottery St Mary in July 1997. The question was if we could approximate the premium would likely be to prolong the lease by 90 years. Identical flats in Ottery St Mary with an extended lease were valued about £235,200. The mid-range ground rent payable was £45 collected per annum. The lease terminated on 17 February 2091. Taking into account 66 years left we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including costs.