Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a fixed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Padstow. Clearly, the length of lease left shortens as time goes by. This is often ignored and only raises itself as an issue when the flat or house has to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Padstow have the right to extend the lease for an additional 90 years under Leasehold Reform legislation. Please give careful consideration before delaying your Padstow lease extension. Putting off that expense now only increases the price you will eventually have to pay for a lease extension
Leasehold properties in Padstow with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you better control over the value of your Padstow leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last October Samuel, started to get close to the eighty-year threshold with the lease on his one bedroom flat in Padstow. In buying his home twenty years previously, the unexpired term was of no concern. Thankfully, he realised he would imminently be paying an escalated premium for Extending the lease. Samuel extended the lease just ahead of time last May. Samuel and the freeholder via the managing agents ultimately settled on sum of £5,500 . If he not met the deadline, the price would have escalated by a minimum £950.
Last February we were called by Dr Amber Lefèvre , who moved into a purpose-built flat in Padstow in September 2004. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Identical premises in Padstow with an extended lease were worth £280,000. The mid-range amount of ground rent was £45 billed annually. The lease terminated on 17 April 2095. Considering the 70 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of legals.
Dr E Mercier took over the lease of a one bedroom apartment in Padstow in November 2001. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by an additional years. Comparable homes in Padstow with an extended lease were valued about £223,400. The average ground rent payable was £60 collected per annum. The lease concluded on 26 November 2084. Taking into account 59 years remaining we estimated the premium to the landlord to extend the lease to be between £27,600 and £31,800 exclusive of professional charges.