Penn 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 your lease becomes more expensive. It is the case that most Penn tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Penn you really ought to investigate if your lease has between 70 and 90 years remaining. There are good reasons why a Penn flat owner with a lease having around 80 years remaining should take steps to make sure that a lease extension is effected without delay
Leasehold premises in Penn with over one hundred years remaining 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 to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant 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. |
| 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
Retaining our service will provide you enhanced control over the value of your Penn leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of lengthy correspondence with the landlord of her purpose-built flat in Penn, Chantelle commenced the lease extension process just as her lease was nearing the all-important eighty-year mark. The lease extension was finalised in March 2009. The landlord’s fees were restricted to less than 600 GBP.
Mrs K Roberts moved into a ground floor apartment in Penn in September 2008. We are asked if we could estimate the price could be for a 90 year lease extension. Comparative premises in Penn with a long lease were valued about £300,000. The mid-range amount of ground rent was £50 billed yearly. The lease ran out on 19 January 2100. Considering the 75 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus fees.
In 2013 we were contacted by Dr Y Cox who, having bought a purpose-built apartment in Penn in April 1998. We are asked if we could approximate the premium would likely be to extend the lease by a further 90 years. Comparable flats in Penn with a long lease were valued around £250,400. The mid-range amount of ground rent was £65 invoiced annually. The lease elapsed in 2089. Taking into account 64 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £19,000 and £22,000 not including professional charges.