The re-sale value of a leasehold property in Torquay is impacted by how long the lease has left to run. If it is close to or fewer than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that formalities can be addressed in advance of the eighty year mark. Statute entitles Torquay qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a supplemental term of ninety years. The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Torquay 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 conveyancing solicitor we work with provide it.
Kian was the the leasehold owner of a conversion flat in Torquay being marketed with a lease of just over 61 years remaining. Kian on an informal basis spoke with his landlord being a well known London-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 per annum. No ground rent would be payable on a lease extension were Kian to invoke his statutory right. Kian obtained expert legal guidance and secured satisfactory deal without going to tribunal and ending up with a market value flat.
In 2013 we were called by Mr and Mrs. D Adams who, having was assigned a lease of a purpose-built flat in Torquay in September 1998. The dilemma was if we could approximate the price could be for a 90 year lease extension. Similar homes in Torquay with an extended lease were worth £254,200. The mid-range ground rent payable was £60 billed every twelve months. The lease concluded on 1 October 2077. Taking into account 51 years remaining we approximated the compensation to the landlord to extend the lease to be within £43,700 and £50,600 exclusive of expenses.
In 2010 we were approached by Mr Thomas Mercier who, having was assigned a lease of a one bedroom apartment in Torquay in July 2010. We are asked if we could approximate the compensation to the landlord could be to extend the lease by a further 90 years. Identical residencies in Torquay with a long lease were valued around £210,600. The mid-range amount of ground rent was £45 billed annually. The lease finished in 2088. Considering the 62 years remaining we calculated the compensation to the landlord to extend the lease to be within £18,100 and £20,800 plus costs.