There is no doubt about it a leasehold property in Penryn is a wasting asset as a result of the shortening lease. Where the lease has, beyond 100 years remaining then this decrease may be fractional that being said there will become a point in time when a lease has under than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the primary reason why you should consider extending without delay. Most flat owners in Penryn will qualify for this right; nevertheless a lawyer can confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold properties in Penryn with more than 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Penryn 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.
Charlie owned a 2 bedroom flat in Penryn being sold with a lease of a few days over 61 years outstanding. Charlie informally approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Charlie to exercise his statutory right. Charlie obtained expert legal guidance and secured an acceptable resolution informally and sell the property.
In 2014 we were contacted by Mrs Phoebe Reed who, having took over the lease of a basement apartment in Penryn in August 1995. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by an additional years. Comparative homes in Penryn with a long lease were worth £193,400. The average ground rent payable was £65 billed per annum. The lease expired in 2083. Taking into account 59 years left we approximated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 not including fees.
In 2014 we were called by Mr and Mrs. Y Stewart who, having purchased a ground floor flat in Penryn in October 2008. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Identical residencies in Penryn with a long lease were valued about £255,000. The average amount of ground rent was £50 invoiced every twelve months. The lease elapsed on 14 July 2094. Given that there were 70 years left we approximated the premium to the landlord for the lease extension to be between £10,500 and £12,000 not including expenses.