Plympton 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 your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Plympton residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Plympton you would be well advised to see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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. |
The conveyancers that we work with handle Plympton 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.
Subsequent to unsuccessful correspondence with the landlord of her one bedroom apartment in Plympton, Hannah commenced the lease extension process just as her lease was nearing the crucial 80-year threshold. The transaction completed in March 2010. The landlord’s costs were restricted to about 700 GBP.
In 2009 we were contacted by Ms Jessica Wood who, having bought a one bedroom flat in Plympton in May 2007. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by ninety years. Similar flats in Plympton with a long lease were worth £208,200. The mid-range amount of ground rent was £65 invoiced annually. The lease lapsed in 2087. Considering the 61 years left we calculated the compensation to the landlord for the lease extension to be within £20,000 and £23,000 not including legals.
In 2010 we were e-mailed by Dr E Gómez who, having bought a first floor apartment in Plympton in July 2006. The question was if we could shed any light on how much (roughly) price would be to prolong the lease by 90 years. Comparative homes in Plympton with an extended lease were valued about £260,000. The average ground rent payable was £50 collected quarterly. The lease finished in 2098. Given that there were 72 years outstanding we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.