Carbis Bay leases on domestic properties are gradually losing value. if your lease has about 90 years left, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease falls below this level then you start paying an additional element called marriage value. Leasehold owners in Carbis Bay will usually be legally entitled to a lease extension; however It would be wise to check with a conveyancing solicitor to confirm your eligibility. In certain circumstances you may not qualify. There are also strict deadlines and steps to follow once the process is initiated so it’s sensible to be guided by a lawyer during the process.
Leasehold premises in Carbis Bay with more than 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Carbis Bay 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 conveyancer we work with provide it.
Ali owned a studio apartment in Carbis Bay being marketed with a lease of fraction over 59 years left. Ali informally approached his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 per annum. No ground rent would be payable on a lease extension were Ali to invoke his statutory right. Ali obtained expert advice and secured an acceptable deal without resorting to tribunal and ending up with a market value flat.
In 2009 we were phoned by Mrs J Parker who, having acquired a one bedroom apartment in Carbis Bay in January 2006. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Similar residencies in Carbis Bay with an extended lease were valued around £280,000. The mid-range amount of ground rent was £55 invoiced per annum. The lease lapsed on 25 February 2104. Having 78 years left we estimated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of expenses.
In 2009 we were called by Dr Liam Mitchell who, having purchased a newly refurbished flat in Carbis Bay in January 1995. The dilemma was if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Comparable properties in Carbis Bay with an extended lease were valued about £191,000. The mid-range ground rent payable was £65 invoiced per annum. The lease ran out in 2084. Having 58 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £23,800 and £27,400 not including professional charges.