Redruth leases on domestic properties are gradually losing value. if your lease has about 90 years remaining, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease falls below this level then you start paying an additional element called marriage value. Flat owners in Redruth will usually be legally entitled to a lease extension; however a solicitor should be able confirm if you qualify. In certain situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated so it’s sensible to be guided by a lawyer during the process.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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 |
The conveyancers that we work with handle Redruth 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.
Ali was the the leasehold owner of a studio flat in Redruth on the market with a lease of a few days over fifty eight years remaining. Ali on an informal basis contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Ali to invoke his statutory right. Ali procured expert advice and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
In 2013 we were e-mailed by Ms Rachel Roberts who, having bought a garden apartment in Redruth in March 2009. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable residencies in Redruth with 100 year plus lease were in the region of £200,000. The mid-range ground rent payable was £50 billed yearly. The lease lapsed in 2104. Given that there were 78 years outstanding we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 not including legals.
Last Summer we were phoned by Mr and Mrs. E Lewis , who purchased a studio flat in Redruth in May 2007. The dilemma was if we could approximate the premium could be for a ninety year extension to my lease. Similar premises in Redruth with an extended lease were valued around £267,600. The average ground rent payable was £65 invoiced per annum. The lease concluded in 2093. Considering the 67 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £14,300 and £16,400 exclusive of costs.