When it comes to long leasehold property in Penzance, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are less than eighty years remaining. Residents in Penzance with a lease approaching 81 years remaining should seriously think of extending it sooner as opposed to later. Once a lease has below eighty years remaining, under the current legislation the landlord is entitled to calculate and demand a greater amount, assessed on a technical multiplication, known as “marriage value” which is due.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
Lender | Requirement |
---|---|
Bank of Scotland | Minimum 70 years from the date of the mortgage. |
Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
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. |
Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Penzance 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.
Mason owned a 2 bedroom apartment in Penzance on the market with a lease of a little over 61 years unexpired. Mason informally approached his landlord a well known Bristol-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Mason to exercise his statutory right. Mason obtained expert advice and secured satisfactory deal without resorting to tribunal and sell the flat.
In 2011 we were e-mailed by Dr Katie Sharif who, having purchased a studio apartment in Penzance in April 2001. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Comparative homes in Penzance with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £55 collected yearly. The lease expired in 2100. Given that there were 76 years outstanding we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.
Mrs Catherine Stewart took over the lease of a studio apartment in Penzance in January 2011. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable properties in Penzance with 100 year plus lease were worth £176,200. The mid-range amount of ground rent was £65 collected annually. The lease finished on 27 May 2080. Considering the 56 years unexpired we estimated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 not including expenses.