When it comes to long leasehold premises in Penrith, you are actually buying a right to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially once there are less than 80 years left. Leasehold owners in Penrith with a lease approaching 81 years remaining should seriously think of extending it sooner as opposed to later. Once the lease term has fewer than eighty years remaining, under the relevant statute the freeholder is entitled to calculate and demand a larger premium, assessed on a technical calculation, known as “marriage value” which is due.
Leasehold properties in Penrith with more than 100 years unexpired 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 situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Penrith 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 conveyancer we work with provide it.
In recent months Jamie, started to get close to the 80-year threshold with the lease on his basement flat in Penrith. Having purchased his property 18 years ago, the lease term was of little bearing. Fortunately, he realised he needed to take action soon on a lease extension. Jamie extended the lease at the eleventh hour in June. Jamie and the freeholder ultimately settled on an amount of £5,000 . If the lease had descended to less than eighty years, the premium would have increased by at least £975.
Mr and Mrs. F Martin owned a one bedroom flat in Penrith in April 2004. We are asked if we could approximate the price would be for a ninety year extension to my lease. Identical properties in Penrith with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £45 collected annually. The lease lapsed in 2097. Considering the 72 years unexpired we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of fees.
Ms Abbie Nelson took over the lease of a garden flat in Penrith in September 2003. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparative residencies in Penrith with an extended lease were valued about £233,200. The average ground rent payable was £60 invoiced annually. The lease finished on 13 May 2086. Having 61 years left we estimated the premium to the landlord for the lease extension to be between £22,800 and £26,400 exclusive of expenses.