For anyone whose Ottery St Mary home is held on a long lease, the message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you better control over the value of your Ottery St Mary leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Matthew owned a conversion apartment in Ottery St Mary on the market with a lease of just over fifty eight years remaining. Matthew informally spoke with his freeholder a well known local-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Matthew to invoke his statutory right. Matthew procured expert advice and secured an acceptable deal informally and ending up with a market value flat.
Dr Maisie Gray bought a ground floor apartment in Ottery St Mary in July 2006. We are asked if we could approximate the price would likely be to prolong the lease by an additional years. Similar flats in Ottery St Mary with a long lease were worth £218,000. The mid-range ground rent payable was £45 collected quarterly. The lease expired in 2088. Given that there were 63 years left we calculated the premium to the freeholder to extend the lease to be between £17,100 and £19,800 not including legals.
Mr and Mrs. H Anderson owned a ground floor apartment in Ottery St Mary in October 2008. We are asked if we could shed any light on how much (roughly) premium could be for a ninety year lease extension. Comparative flats in Ottery St Mary with an extended lease were in the region of £270,000. The average amount of ground rent was £55 collected yearly. The lease termination date was on 9 August 2099. Considering the 74 years left we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus professional charges.