Penryn leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Penryn tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Penryn you really ought to check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Penryn with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
| 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. |
| 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. |
| 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 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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 get guidance from a conveyancer and valuer 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 in-depth market knowledge 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.
Half a year ago Alex, started to get near to the eighty-year threshold with the lease on his studio flat in Penryn. In buying his flat 18 years previously, the length of the lease was of no concern. Fortunately, he recognised he would imminently be paying an escalated premium for a lease extension. Alex was able to extend his lease just in the nick of time last August. Alex and the landlord who owned the flat above in the end agreed on sum of £5,000 . If the lease had slipped below eighty years, the premium would have increased by at least £1,075.
Mr and Mrs. A Lefebvre was assigned a lease of a garden apartment in Penryn in April 2008. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar flats in Penryn with an extended lease were worth £203,200. The mid-range ground rent payable was £65 collected every twelve months. The lease ran out on 3 January 2087. Given that there were 61 years unexpired we calculated the premium to the freeholder for the lease extension to be within £19,000 and £22,000 not including fees.
In 2010 we were contacted by Mr and Mrs. C Rodríguez who, having was assigned a lease of a purpose-built apartment in Penryn in July 1997. The dilemma was if we could approximate the premium could be for a 90 year extension to my lease. Similar properties in Penryn with an extended lease were in the region of £260,000. The average amount of ground rent was £50 collected quarterly. The lease lapsed in 2098. Given that there were 72 years left we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including costs.