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. The majority of owners of residential leasehold property in Penzance enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Penzance you would be well advised to check if your lease has between 70 and 90 years remaining. There are compelling reasons why a Penzance leaseholder with a lease having around 80 years remaining should take action to make sure that a lease extension is put in place without delay
Leasehold premises in Penzance with in excess of 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 buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Using our service gives you better control over the value of your Penzance leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Theo owned a high value flat in Penzance being marketed with a lease of a little over 59 years outstanding. Theo on an informal basis spoke with his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Theo to exercise his statutory right. Theo obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
Last Spring we were called by Mr and Mrs. M Hall , who acquired a ground floor flat in Penzance in September 1999. We are asked if we could estimate the premium could be to prolong the lease by 90 years. Comparative flats in Penzance with an extended lease were worth £256,600. The average amount of ground rent was £60 billed annually. The lease expired on 18 January 2077. Given that there were 52 years left we estimated the premium to the landlord for the lease extension to be between £41,800 and £48,400 plus fees.
Ms Yasmin Parker was assigned a lease of a garden flat in Penzance in February 2012. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable flats in Penzance with a long lease were valued around £215,600. The mid-range amount of ground rent was £45 invoiced per annum. The lease expired on 4 July 2087. Having 62 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £18,100 and £20,800 not including expenses.