Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a fixed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Penshaw. Inevitably, the term of lease remaining shortens over time. This is often ignored and only becomes a problem when the residence has to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to extend the lease. Eligible long lease owners in Penshaw have the right to extend the lease for an additional ninety years under legislation. Do give due consideration before delaying your Penshaw lease extension. Holding off that expense now only increases the price you will ultimately incur for a lease extension
Leasehold residencies in Penshaw with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Penshaw can be a difficult process. We recommend you secure guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Penshaw lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Off the back of protracted discussions with the freeholder of her studio apartment in Penshaw, Alisha initiated the lease extension process just as the lease was approaching the crucial eighty-year deadline. The transaction was concluded in July 2007. The landlord’s charges were kept to an absolute minimum.
In 2010 we were approached by Mr and Mrs. V Bell who, having acquired a one bedroom flat in Penshaw in May 2008. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Comparable properties in Penshaw with a long lease were in the region of £275,000. The mid-range ground rent payable was £55 billed per annum. The lease expiry date was on 20 August 2101. Considering the 76 years as a residual term we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of legals.
In 2012 we were e-mailed by Mr and Mrs. H Sánchez who, having completed a studio apartment in Penshaw in March 2007. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparable residencies in Penshaw with an extended lease were worth £176,200. The average ground rent payable was £65 collected quarterly. The lease termination date was on 10 May 2081. Given that there were 56 years outstanding we estimated the premium to the freeholder to extend the lease to be between £29,500 and £34,000 plus fees.