Unfortunately that a Padstow residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Padstow property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher amount will be due. The majority of flat owners in Padstow will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold properties in Padstow with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you better control over the value of your Padstow leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Seth was the the leasehold proprietor of a conversion flat in Padstow being sold with a lease of fraction over fifty eight years left. Seth informally approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Seth to invoke his statutory right. Seth obtained expert advice and was able to make a more informed decision and deal with the matter and sell the property.
Last November we were contacted by Dr Freddie Allen , who bought a first floor apartment in Padstow in January 2003. The dilemma was if we could approximate the price would be for a 90 year lease extension. Comparable premises in Padstow with a long lease were in the region of £191,400. The average amount of ground rent was £55 collected monthly. The lease ran out on 6 July 2079. Considering the 54 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £34,200 and £39,600 not including expenses.
Last Summer we were phoned by Mrs Yasmin Jones , who bought a first floor apartment in Padstow in March 1998. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparative properties in Padstow with 100 year plus lease were worth £295,000. The average amount of ground rent was £45 billed quarterly. The lease lapsed on 8 January 2099. Having 74 years unexpired we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 not including fees.