As the the remaining lease term of a Mevagissey residential lease lessens so does its value and therefore the value of your property. If the lease has, beyond 100 years remaining then this decrease may be negligible nevertheless there will become a stage when a lease has fewer than 80 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 primary reason why you should extend the lease without delay. The majority of flat owners in Mevagissey will qualify for this right; nevertheless a lawyer will be able to confirm if you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold properties in Mevagissey with over 100 years unexpired 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 circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Mevagissey,the lease extension solicitors 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 Mevagissey valuers.
Following lengthy discussions with the landlord of her first floor flat in Mevagissey, Georgia initiated the lease extension process just as the lease was coming close to the all-important 80-year mark. The lease extension completed in July 2009. The freeholder’s costs were kept to an absolute minimum.
Last month we were approach by Mrs F Green , who moved into a recently refurbished flat in Mevagissey in October 2009. The dilemma was if we could approximate the price could be for a ninety year lease extension. Identical properties in Mevagissey with a long lease were valued around £285,000. The mid-range amount of ground rent was £55 billed yearly. The lease terminated on 7 November 2106. Having 80 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including expenses.
In 2010 we were called by Mr and Mrs. L Hill who, having moved into a one bedroom flat in Mevagissey in June 2007. The dilemma was if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Identical residencies in Mevagissey with an extended lease were worth £200,800. The average amount of ground rent was £65 collected annually. The lease concluded in 2086. Considering the 60 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £20,900 and £24,200 not including fees.