For anyone whose St Austell property is held on a long lease, the message is clear – if you do nothing, your property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to extend the lease.
Leasehold premises in St Austell with more than 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit 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. |
| 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. |
| 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. |
| 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. |
Retaining our service will provide you enhanced control over the value of your St Austell leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Riley owned a 2 bedroom flat in St Austell being sold with a lease of a little over 59 years remaining. Riley on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 per annum. No ground rent would be due on a lease extension were Riley to invoke his statutory right. Riley obtained expert legal guidance and secured satisfactory resolution informally and sell the property.
Mr U Edwards moved into a recently refurbished apartment in St Austell in February 2009. The dilemma was if we could approximate the price would likely be for a 90 year extension to my lease. Identical premises in St Austell with an extended lease were valued around £265,000. The mid-range ground rent payable was £50 billed every twelve months. The lease expired on 18 June 2098. Taking into account 73 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including legals.
Last month we were phoned by Ms Courtney Sánchez , who bought a one bedroom apartment in St Austell in November 2007. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Similar residencies in St Austell with 100 year plus lease were worth £264,000. The mid-range ground rent payable was £60 collected monthly. The lease termination date was on 10 October 2078. Taking into account 53 years left we approximated the compensation to the freeholder to extend the lease to be between £37,100 and £42,800 plus fees.