It’s an underpublicised certainty that a Helston residential lease is a deteriorating 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 deflation being disguised by increases in the Helston property market.Once your lease nears 85ish years, you should start thinking about 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 slips below eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Helston will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with handle Helston 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.
Two years ago Adam, started to get near to the 80-year mark with the lease on his one bedroom apartment in Helston. In buying his property two decades ago, the lease term was of no importance. As luck would have it, he realised he would soon be paying an inflated amount for a lease extension. Adam was able to extend his lease at the eleventh hour last July. Adam and the freeholder via the managing agents eventually agreed on an amount of £5,500 . If he failed to meet the deadline, the amount would have increased by at least £950.
Last Summer we were approach by Dr L Anderson , who moved into a newly refurbished apartment in Helston in May 2007. The question was if we could approximate the premium would be for a 90 year lease extension. Comparative flats in Helston with an extended lease were valued around £200,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease finished on 9 November 2103. Taking into account 77 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of costs.
In 2010 we were called by Mrs Kirsty Campbell who, having was assigned a lease of a basement apartment in Helston in August 1997. The dilemma was if we could approximate the premium could be for a 90 year extension to my lease. Identical homes in Helston with an extended lease were valued about £265,200. The average ground rent payable was £65 collected every twelve months. The lease lapsed in 2092. Taking into account 66 years unexpired we calculated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 plus fees.