It’s an underpublicised certainty that a Falmouth residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Falmouth property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher amount will be due. Most leasehold owners in Falmouth will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Yorkshire 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. |
Retaining our service will provide you enhanced control over the value of your Falmouth leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy negotiations with the freeholder of her one bedroom flat in Falmouth, Victoria initiated the lease extension process just as the lease was nearing the crucial 80-year mark. The transaction completed in October 2014. The landlord’s fees were kept to an absolute minimum.
In 2010 we were contacted by Dr Imogen Bell who, having purchased a newly refurbished flat in Falmouth in August 2006. We are asked if we could approximate the price could be to extend the lease by an additional years. Comparable flats in Falmouth with 100 year plus lease were valued around £275,000. The mid-range amount of ground rent was £55 billed every twelve months. The lease terminated on 14 March 2101. Taking into account 77 years remaining we estimated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 not including costs.
Last Autumn we were called by Mr and Mrs. B Garcia , who bought a one bedroom flat in Falmouth in September 2004. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparative residencies in Falmouth with 100 year plus lease were in the region of £183,600. The average amount of ground rent was £65 invoiced every twelve months. The lease ran out in 2081. Given that there were 57 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of costs.