Redruth residential property held on a long lease is a depreciating asset as the leaseholder merely owns the property for a period of years.
Leasehold residencies in Redruth with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 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 lawyer we work with provide it.
Jacob owned a studio flat in Redruth on the market with a lease of just over sixty years unexpired. Jacob on an informal basis contacted his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jacob to exercise his statutory right. Jacob procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
In 2012 we were approached by Ms Jennifer Taylor who, having was assigned a lease of a first floor apartment in Redruth in August 1999. We are asked if we could approximate the premium could be to extend the lease by 90 years. Identical premises in Redruth with a long lease were worth £191,400. The average amount of ground rent was £55 billed quarterly. The lease lapsed on 19 May 2080. Given that there were 54 years outstanding we estimated the premium to the landlord to extend the lease to be between £34,200 and £39,600 plus fees.
In 2011 we were approached by Mr Harrison François who, having purchased a studio flat in Redruth in October 2011. We are asked if we could estimate the price would likely be to prolong the lease by a further 90 years. Comparative flats in Redruth with a long lease were worth £295,000. The mid-range amount of ground rent was £45 collected per annum. The lease expired on 4 November 2100. Having 74 years as a residual term we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including expenses.