Chances are that where you own a flat in Redruth you actually own a long leasehold interest over your property
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| 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. |
| National Westminster Bank | 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 conveyancers 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.
16 months ago Archie, started to get near to the eighty-year mark with the lease on his first floor apartment in Redruth. Having purchased his flat 19 years previously, the lease term was of no importance. Thankfully, it dawned on him that he would soon be paying an escalated premium for a lease extension. Archie extended the lease just under the wire last January. Archie and the freeholder ultimately agreed on sum of £5,000 . If the lease had descended below eighty years, the sum would have gone up by a minimum £850.
In 2011 we were approached by Mrs T Scott who, having was assigned a lease of a purpose-built apartment in Redruth in January 2011. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Comparable homes in Redruth with 100 year plus lease were worth £184,000. The average amount of ground rent was £55 billed per annum. The lease lapsed on 14 October 2078. Considering the 53 years as a residual term we calculated the premium to the landlord for the lease extension to be between £28,500 and £33,000 not including expenses.
Dr K Wright took over the lease of a one bedroom flat in Redruth in August 2005. The dilemma was if we could approximate the premium would be for a 90 year extension to my lease. Comparable premises in Redruth with 100 year plus lease were worth £290,000. The average ground rent payable was £45 billed annually. The lease came to a finish in 2098. Given that there were 73 years unexpired we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.