The re-sale value of a leasehold property in Penryn depends on how many years the lease has left to run. If it is close to or less than 80 years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension ahead of purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be addressed prior to the 80 year mark. Statute enables Penryn qualifying lessees to obtain a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Penryn with in excess of one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle 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 conveyancing solicitor we work with provide it.
After lengthy discussions with the landlord of her ground floor apartment in Penryn, Rachael initiated the lease extension process just as her lease was nearing the critical 80-year deadline. The lease extension completed in January 2009. The freeholder’s fees were negotiated to below 500 GBP.
Last Winter we were e-mailed by Dr Sophie Bertrand , who moved into a purpose-built flat in Penryn in May 1997. The question was if we could shed any light on how much (approximately) price would likely be to prolong the lease by a further 90 years. Similar homes in Penryn with an extended lease were valued about £218,000. The mid-range ground rent payable was £45 billed quarterly. The lease elapsed in 2088. Considering the 63 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £17,100 and £19,800 not including legals.
In 2012 we were phoned by Dr J Wood who, having acquired a first floor apartment in Penryn in January 2010. The dilemma was if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Comparative premises in Penryn with a long lease were worth £265,000. The mid-range amount of ground rent was £50 collected annually. The lease expiry date was in 2099. Having 74 years unexpired we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of fees.