There is no doubt about it a leasehold property in Redruth is a wasting asset as a result of the diminishing lease term. If the lease has, more than one hundred years remaining then this decrease may be negligible nevertheless there will become a point in time when a lease has under than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main rational as to why you should extend the lease sooner rather than later. Most flat owners in Redruth will qualify for this right; nevertheless a conveyancer can confirm if you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for less than two years.
Leasehold properties in Redruth with over 100 years remaining 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 property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Redruth,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Redruth valuers.
Isaac owned a 2 bedroom apartment in Redruth being marketed with a lease of fraction over 72 years remaining. Isaac on an informal basis approached his landlord being a well known London-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 per annum. No ground rent would be due on a lease extension were Isaac to exercise his statutory right. Isaac procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
In 2012 we were phoned by Mr J Cook who, having moved into a one bedroom flat in Redruth in May 2010. The question was if we could estimate the price would be to extend the lease by 90 years. Comparable homes in Redruth with 100 year plus lease were worth £174,200. The average amount of ground rent was £55 collected every twelve months. The lease ended in 2077. Taking into account 51 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of legals.
Mr and Mrs. V Evans moved into a ground floor flat in Redruth in September 1995. We are asked if we could approximate the premium could be for a 90 year lease extension. Comparable residencies in Redruth with a long lease were valued about £285,000. The average ground rent payable was £45 billed monthly. The lease end date was on 27 August 2097. Taking into account 71 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 fees.