The value of Penryn leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase substantially once the unexpired lease term is less than 80 years
Leasehold properties in Penryn with in excess of one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Lease extensions in Penryn can be a difficult process. We recommend you procure professional help from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Penryn lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Jonathan was the the leasehold owner of a 2 bedroom flat in Penryn on the market with a lease of a little over sixty years outstanding. Jonathan informally approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jonathan to invoke his statutory right. Jonathan procured expert legal guidance and secured an acceptable deal without resorting to tribunal and sell the property.
Last year we were approach by Mr and Mrs. J Brown , who moved into a purpose-built flat in Penryn in January 2008. The question was if we could shed any light on how much (roughly) premium could be for a ninety year extension to my lease. Comparable properties in Penryn with a long lease were worth £285,000. The average amount of ground rent was £55 collected monthly. The lease finished in 2106. Considering the 80 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including professional charges.
Last Winter we were contacted by Ms Hollie Hall , who acquired a one bedroom apartment in Penryn in April 1999. We are asked if we could estimate the premium could be to prolong the lease by a further 90 years. Similar homes in Penryn with an extended lease were worth £200,800. The average ground rent payable was £65 invoiced every twelve months. The lease expired in 2086. Given that there were 60 years left we approximated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of expenses.