With a long leasehold premises in Penrith, you are actually purchasing a right to reside in a property for a prescribed time frame. In recent years 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 should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately greater especially once there are less than eighty years remaining. Leasehold owners in Penrith with a lease approaching 81 years left should seriously think of extending it sooner as opposed to later. When the lease term has under 80 years outstanding, under the current statute the freeholder is entitled to calculate and levy a greater premium, based on a technical computation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| Yorkshire 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. |
The lawyers that we work with undertake 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 lawyer we work with provide it.
Edward was the the leasehold proprietor of a 2 bedroom flat in Penrith being sold with a lease of a few days over sixty years outstanding. Edward on an informal basis approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Edward to exercise his statutory right. Edward procured expert advice and secured satisfactory deal without resorting to tribunal and sell the property.
Last Summer we were called by Mr Riley King , who owned a one bedroom apartment in Penrith in February 2012. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Similar residencies in Penrith with a long lease were in the region of £275,000. The average amount of ground rent was £45 billed yearly. The lease elapsed on 22 June 2095. Taking into account 69 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus legals.
Last Spring we were e-mailed by Dr Amelia Leroy , who took over the lease of a one bedroom apartment in Penrith in July 2004. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Comparative premises in Penrith with an extended lease were in the region of £216,000. The average ground rent payable was £60 collected yearly. The lease ran out on 25 June 2084. Having 58 years left we estimated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 not including fees.