It’s an underpublicised certainty that a Penryn residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Penryn property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining dips below eighty years, you will end up paying 50% of the property's 'marriage value' in addition to 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 leasehold owners in Penryn will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to 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 over one hundred years remaining is worth roughly 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 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. |
| Birmingham Midshires | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you increased control over the value of your Penryn leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas Andrew, started to get close to the 80-year mark with the lease on his purpose- built apartment in Penryn. In buying his property 18 years previously, the lease term was of no significance. by good luck, it dawned on him that he needed to take steps soon on a lease extension. Andrew arranged for a lease extension at the eleventh hour in April. Andrew and the landlord who owned the flat above subsequently settled on the final figure of £5,500 . If he not met the deadline, the price would have gone up by at least £1,025.
Dr D Edwards acquired a basement flat in Penryn in February 2000. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by an additional years. Identical properties in Penryn with a long lease were worth £220,400. The average amount of ground rent was £45 invoiced every twelve months. The lease ended in 2090. Having 64 years remaining we estimated the premium to the freeholder for the lease extension to be between £16,200 and £18,600 not including fees.
Last Christmas we were e-mailed by Dr Y Murphy , who owned a one bedroom flat in Penryn in January 1996. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparative homes in Penryn with a long lease were valued around £270,000. The average amount of ground rent was £55 collected annually. The lease ended in 2101. Having 75 years remaining we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of costs.