It’s a harsh truth that a Padstow residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Padstow property prices.Once your lease gets to 85ish years, you need to start thinking about 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 eighty years - otherwise a higher premium will be payable. Most leasehold owners in Padstow will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. 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. |
| 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. |
Using our service gives you enhanced control over the value of your Padstow leasehold, as your property will be more valuable and marketable in respect of 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.
Half a year ago Max, came seriously close to the eighty-year threshold with the lease on his first floor flat in Padstow. In buying his property two decades ago, the unexpired term was of no interest. As luck would have it, he realised he needed to take action soon on Extending the lease. Max arranged for a lease extension just under the wire in March. Max and the freeholder subsequently agreed on sum of £5,000 . If he failed to meet the deadline, the price would have become more exhorbitant by at least £925.
In 2012 we were e-mailed by Mr and Mrs. W Thomas who, having acquired a studio flat in Padstow in September 1997. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Comparable properties in Padstow with 100 year plus lease were valued around £275,000. The average amount of ground rent was £65 collected per annum. The lease came to a finish on 6 October 2094. Taking into account 68 years left we calculated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 not including fees.
In 2013 we were contacted by Mr and Mrs. G Sharif who, having completed a basement flat in Padstow in August 2009. The question was if we could approximate the premium would likely be to prolong the lease by an additional years. Comparative flats in Padstow with a long lease were valued about £208,600. The average amount of ground rent was £60 billed quarterly. The lease came to a finish on 3 October 2083. Taking into account 57 years remaining we approximated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 plus expenses.