The re-sale value of a leasehold property in Mevagissey depends on how many years the lease has remaining. If it is close to or fewer than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is preferable to commence the lease extension process when a lease still has 82 years to run so that all matters can be finalised ahead of the eighty year cut off point. Current legislation entitles Mevagissey qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of ninety years. The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Mevagissey leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
John was the the leasehold proprietor of a conversion flat in Mevagissey on the market with a lease of a little over 59 years left. John informally contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were John to exercise his statutory right. John obtained expert advice and secured an acceptable deal informally and sell the flat.
Last Summer we were approach by Ms Chloe Lefebvre , who purchased a first floor apartment in Mevagissey in February 1995. We are asked if we could approximate the price would be to prolong the lease by 90 years. Identical premises in Mevagissey with 100 year plus lease were valued about £250,000. The average amount of ground rent was £50 invoiced yearly. The lease ended on 16 August 2095. Given that there were 70 years left we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus legals.
In 2012 we were contacted by Dr N Carter who, having acquired a one bedroom apartment in Mevagissey in September 2004. The question was if we could estimate the price would be to prolong the lease by an additional years. Identical flats in Mevagissey with an extended lease were worth £246,800. The average amount of ground rent was £60 collected monthly. The lease finished in 2075. Considering the 50 years as a residual term we approximated the premium to the landlord for the lease extension to be within £44,700 and £51,600 not including expenses.