The market value of Falmouth leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate substantially once the remaining term is less than 80 years
Leasehold premises in Falmouth with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The lawyers that we work with undertake Falmouth 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.
Last Summer Alfie, started to get near to the eighty-year mark with the lease on his first floor flat in Falmouth. In buying his home two decades ago, the lease term was of little concern. by good luck, he recognised he needed to take action soon on a lease extension. Alfie extended the lease at the eleventh hour in January. Alfie and the freeholder via the managing agents ultimately agreed on an amount of £5,500 . If he not met the deadline, the sum would have gone up by a minimum £925.
Last Spring we were e-mailed by Mr R Morgan , who owned a purpose-built apartment in Falmouth in October 2005. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar premises in Falmouth with an extended lease were in the region of £218,000. The average ground rent payable was £45 invoiced quarterly. The lease concluded on 16 May 2089. Taking into account 63 years left we calculated the compensation to the landlord to extend the lease to be within £17,100 and £19,800 exclusive of professional charges.
Last Summer we were approach by Mr Sebastian Martinez , who purchased a first floor flat in Falmouth in September 1996. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparable premises in Falmouth with a long lease were valued about £270,000. The mid-range ground rent payable was £55 collected every twelve months. The lease elapsed in 2100. Given that there were 74 years unexpired we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of costs.