Unfortunately that a Torquay residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Torquay property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining slips under 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Torquay will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 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 conveyancer we work with provide it.
Samuel was the the leasehold owner of a conversion flat in Torquay being marketed with a lease of a few days over 72 years left. Samuel on an informal basis approached his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £200 yearly. No ground rent would be payable on a lease extension were Samuel to exercise his statutory right. Samuel procured expert advice and was able to make an informed decision and deal with the matter and sell the flat.
In 2009 we were e-mailed by Mr Eli Khan who, having took over the lease of a one bedroom apartment in Torquay in May 2009. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by an additional years. Comparable properties in Torquay with 100 year plus lease were valued around £285,000. The average ground rent payable was £55 collected per annum. The lease finished in 2104. Considering the 79 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus costs.
In 2014 we were called by Mr and Mrs. D Rivera who, having moved into a one bedroom apartment in Torquay in June 1996. The question was if we could shed any light on how much (approximately) premium would likely be for a 90 year extension to my lease. Comparable residencies in Torquay with an extended lease were in the region of £193,400. The mid-range ground rent payable was £65 invoiced yearly. The lease ran out in 2084. Taking into account 59 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 plus expenses.