St Mawes leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most St Mawes tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in St Mawes you would be well advised to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in St Mawes,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 experience and the close ties they enjoy with St Mawes valuers.
Omar owned a conversion flat in St Mawes being sold with a lease of just over 59 years left. Omar informally approached his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Omar to exercise his statutory right. Omar obtained expert legal guidance and secured an acceptable deal informally and sell the flat.
Last April we were e-mailed by Mr Logan King , who took over the lease of a first floor apartment in St Mawes in November 2011. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparative flats in St Mawes with a long lease were valued around £265,000. The average ground rent payable was £55 invoiced annually. The lease terminated in 2099. Taking into account 74 years unexpired we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.
In 2010 we were e-mailed by Mr C Murphy who, having acquired a basement flat in St Mawes in November 2003. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in St Mawes with a long lease were worth £166,400. The average amount of ground rent was £60 collected every twelve months. The lease ran out on 24 August 2079. Having 54 years outstanding we approximated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 plus fees.