It’s a harsh certainty that a Penryn residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Penryn property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining drops below 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most flat owners in Penryn will be able to extend under the legislation; however a lawyer should 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 initiated and you will need to be guided by your conveyancing solicitor throughout the process.
It is conventional wisdom that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers 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 lawyer we work with provide it.
Subsequent to unsuccessful discussions with the freeholder of her first floor apartment in Penryn, Katie started the lease extension process just as her lease was approaching the all-important 80-year mark. The lease extension completed in March 2013. The freeholder’s fees were kept to an absolute minimum.
In 2014 we were e-mailed by Mr and Mrs. J Martin who, having acquired a studio flat in Penryn in August 1999. We are asked if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Similar residencies in Penryn with a long lease were in the region of £237,600. The mid-range ground rent payable was £45 invoiced per annum. The lease ran out on 24 April 2093. Given that there were 67 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £11,400 and £13,200 not including costs.
Last Summer we were contacted by Ms B Watson , who took over the lease of a garden apartment in Penryn in August 1995. The question was if we could estimate the price would likely be for a ninety year extension to my lease. Comparable flats in Penryn with 100 year plus lease were in the region of £280,000. The average amount of ground rent was £55 collected quarterly. The lease end date was on 12 October 2104. Considering the 78 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 plus fees.