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 first few years due to the loss of value being disguised by increases in the Penryn property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining dips under 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Penryn will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold residencies in Penryn with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Penryn,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Penryn valuers.
Subsequent to lengthy negotiations with the landlord of her first floor flat in Penryn, Lydia started the lease extension process as the eighty year threshold was rapidly coming. The legal work was finalised in April 2015. The freeholder’s fees were kept to an absolute minimum.
Last February we were phoned by Mr and Mrs. I Díaz , who acquired a purpose-built flat in Penryn in June 2002. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Similar premises in Penryn with 100 year plus lease were in the region of £193,400. The mid-range ground rent payable was £65 billed annually. The lease came to a finish in 2085. Having 59 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 exclusive of fees.
In 2010 we were phoned by Dr Ben Evans who, having completed a basement apartment in Penryn in March 2002. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparable flats in Penryn with a long lease were worth £250,000. The average amount of ground rent was £50 billed quarterly. The lease elapsed on 17 February 2096. Taking into account 70 years outstanding we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of expenses.