It’s an underpublicised certainty that a Penzance residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Penzance property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term slips under 80 years, you will end up paying 50% 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 Penzance will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Penzance,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 Penzance valuers.
Andrew was the the leasehold owner of a high value flat in Penzance being sold with a lease of a few days over 61 years left. Andrew on an informal basis approached his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Andrew to invoke his statutory right. Andrew obtained expert advice and was able to make a more informed decision and handle with the matter and sell the flat.
In 2009 we were called by Mr and Mrs. Y Rodríguez who, having took over the lease of a garden flat in Penzance in August 2000. We are asked if we could approximate the premium could be to prolong the lease by an additional years. Identical residencies in Penzance with an extended lease were in the region of £215,600. The mid-range ground rent payable was £45 invoiced per annum. The lease end date was on 20 June 2087. Given that there were 62 years unexpired we calculated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 not including expenses.
Last Winter we were called by Mr and Mrs. W Laurent , who was assigned a lease of a ground floor flat in Penzance in June 2003. The question was if we could approximate the price would likely be for a 90 year extension to my lease. Identical premises in Penzance with 100 year plus lease were in the region of £265,000. The average amount of ground rent was £50 billed annually. The lease elapsed in 2098. Considering the 73 years left we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus legals.