With a long leasehold property in Plymouth, you effectively rent it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive especially when there are less than 80 years left. Leasehold owners in Plymouth with a lease nearing 81 years left should seriously consider extending it as soon as possible. Once the lease term has less than 80 years remaining, under the relevant statute the landlord is entitled to calculate and levy a larger amount, assessed on a technical multiplication, known as “marriage value” which is payable.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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; |
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Lease extensions in Plymouth can be a difficult process. We recommend you get guidance from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Plymouth lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ollie owned a conversion apartment in Plymouth being marketed with a lease of a little over 61 years remaining. Ollie on an informal basis contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Ollie to exercise his statutory right. Ollie obtained expert legal guidance and was able to make an informed decision and deal with the matter and sell the flat.
In 2010 we were e-mailed by Dr K Rogers who, having took over the lease of a studio flat in Plymouth in November 2005. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Identical properties in Plymouth with an extended lease were in the region of £200,000. The average ground rent payable was £50 collected monthly. The lease finished in 2103. Given that there were 78 years unexpired we estimated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.
In 2009 we were contacted by Mr L Baker who, having owned a one bedroom flat in Plymouth in September 2009. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Similar residencies in Plymouth with 100 year plus lease were valued around £267,600. The mid-range amount of ground rent was £65 collected per annum. The lease ran out on 18 October 2092. Considering the 67 years outstanding we estimated the premium to the landlord to extend the lease to be between £14,300 and £16,400 exclusive of legals.