Penzance leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Penzance tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Penzance you must check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Penzance with more than 100 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 premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Penzance can be a difficult process. We recommend you obtain professional help from a lawyer and surveyor with experience in this area.
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 Penzance 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 John, started to get close to the 80-year threshold with the lease on his leasehold apartment in Penzance. Having bought his home 18 years previously, the unexpired term was of no importance. by good luck, he realised he would soon be paying an inflated amount for a lease extension. John arranged for a lease extension just under the wire last March. John and the landlord ultimately agreed on an amount of £5,500 . If the lease had descended to less than 80 years, the figure would have increased by a minimum £925.
Mr and Mrs. L Martinez completed a one bedroom apartment in Penzance in January 1996. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Identical premises in Penzance with 100 year plus lease were worth £255,000. The mid-range ground rent payable was £50 billed quarterly. The lease expired in 2096. Given that there were 71 years remaining we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including professional charges.
In 2012 we were approached by Ms Isabel Evans who, having took over the lease of a basement flat in Penzance in January 1996. The dilemma was if we could estimate the premium would likely be to extend the lease by ninety years. Comparable properties in Penzance with 100 year plus lease were worth £246,800. The average ground rent payable was £60 collected monthly. The lease elapsed in 2075. Considering the 50 years left we estimated the premium to the freeholder for the lease extension to be within £44,700 and £51,600 plus legals.