When it comes to long leasehold premises in Redruth, you effectively rent it for a certain period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are less than eighty years remaining. Leasehold owners in Redruth with a lease approaching 81 years unexpired should seriously consider extending it without delay. Once the lease term has below 80 years left, under the current Act the landlord can calculate and charge a larger amount, based on a technical multiplication, known as “marriage value” which is payable.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you increased control over the value of your Redruth leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted correspondence with the freeholder of her first floor flat in Redruth, Courtney started the lease extension process just as her lease was coming close to the crucial 80-year threshold. The transaction completed in May 2010. The landlord’s costs were negotiated to under 600 pounds.
Dr Sian Jones bought a garden flat in Redruth in February 2006. We are asked if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Similar homes in Redruth with a long lease were valued about £198,800. The mid-range ground rent payable was £55 collected quarterly. The lease came to a finish in 2081. Considering the 55 years unexpired we approximated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 not including costs.
In 2013 we were called by Mr and Mrs. O Morgan who, having bought a garden flat in Redruth in September 2000. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Identical properties in Redruth with an extended lease were worth £295,000. The average amount of ground rent was £50 invoiced quarterly. The lease came to a finish on 13 November 2101. Having 75 years remaining we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of legals.