Top reasons for Mevagissey lease extension
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Why you should commence your Mevagissey lease extension today: </h3>
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Increase your lease and increase your <a href="http://www.lendermonitor.com/conveyancing/loc/mevagissey">Mevagissey</a> property value </h4>
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Mevagissey leases on residential properties are gradually losing 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. It is the case that most Mevagissey tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Mevagissey you should investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value <h4>Mevagissey property with a lease extension is almost the same value as a freehold</h4>
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Leasehold premises in Mevagissey with in excess of one hundred years remaining 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 upside in buying the reversionary interest unless savings on ground rent and service charges justify it. <h4>Mortgage lenders may not finance a property on a short lease</h4> Banks and Building Societies have set criteria when loaning funds secured on leasehold property. Some will simply not lend at all once an unexpired lease term falls below a specified unexpired lease term. Many Mortgage lenders will not consider property with a remaining term of less than 75 years as adequate security. As well as this being important when selling, it is also relevant if you are wanting to refinance your Mevagissey home.
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<tr><th>Lender</th>
<th> Requirement
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<td>Barclays plc</td>
<td> Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below).<br /><br />Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office.<br /><br />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:<br /><br />• 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<br />• The value of the property subject to the short remaining term is £500,000 or more AND<br />• 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;
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<td>Lloyds TSB Scotland</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>National Westminster Bank</td>
<td> Mortgage term plus 30 years.<br /><br />For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage.
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<td>The Mortgage Works</td>
<td> Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. <br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 70 years<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 70 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office): <br />- Unexpired lease term greater than 85 years<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (will be declined):<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house <br />- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house <br />- A lease subject to a peppercorn ground rent (annual rent) charges <br /><br />For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? <br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years<br /><br />LEASE EXTENSIONS<br /><br />We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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<td>Royal Bank of Scotland</td>
<td> Mortgage term plus 30 years.
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<h4> Get in touch with one of our Mevagissey lease extension solicitors or enfranchisement solicitors
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The lawyers that we work with undertake Mevagissey 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.
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Mevagissey Lease Extension Case Summaries:
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<h5> Noah, Mevagissey, Cornwall</h5>
<p> Two years ago Noah, started to get near to the 80-year threshold with the lease on his leasehold flat in Mevagissey. In buying his property 18 years previously, the lease term was of minimal importance. Fortunately, he noticed he needed to take steps soon on a lease extension. Noah extended the lease at the eleventh hour last March. Noah and the landlord who owned the flat above ultimately settled on a premium of £5,000 . If the lease had fallen lower than eighty years, the price would have become more exhorbitant by at least £1,050.
<h5>Mevagissey case:</h5>
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Last Summer we were contacted by Mr J Gunderson , who
moved into a one bedroom apartment in Mevagissey in November 2009. We are asked if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Similar homes in Mevagissey with 100 year plus lease were valued about £250,000. The average ground rent payable was £50 collected annually. The lease elapsed on 23 October 2095. Given that there were 69 years left we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including expenses.
<h5>Mevagissey case:</h5>
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In 2012 we were contacted by Dr William Wright who, having purchased a one bedroom flat in Mevagissey in September 1998. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Identical flats in Mevagissey with 100 year plus lease were worth £285,000. The average ground rent payable was £55 collected yearly. The lease ran out in 2106. Taking into account 80 years left we approximated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including costs.
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