Penzance leases on domestic properties are gradually losing value. Where your lease has about 90 years left, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease dips below this level then you start incurring an additional element called marriage value. Leasehold owners in Penzance will mostly be legally entitled to a lease extension; however It would be wise to check with a conveyancing solicitor to confirm your eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to comply with once the process has commenced so it’s sensible to be guided by a conveyancer during the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Penzance,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Penzance valuers.
Tyler owned a 2 bedroom flat in Penzance being marketed with a lease of just over sixty years left. Tyler on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 per annum. No ground rent would be due on a lease extension were Tyler to exercise his statutory right. Tyler obtained expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Dr G Michel moved into a purpose-built apartment in Penzance in June 1996. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Identical residencies in Penzance with 100 year plus lease were worth £260,000. The mid-range amount of ground rent was £50 billed monthly. The lease finished in 2097. Taking into account 71 years remaining we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus professional charges.
In 2013 we were phoned by Mr L Fournier who, having was assigned a lease of a first floor apartment in Penzance in June 2000. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Identical homes in Penzance with a long lease were worth £254,200. The average amount of ground rent was £60 collected annually. The lease end date was on 4 May 2077. Given that there were 51 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £43,700 and £50,600 plus fees.