Padstow leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Padstow residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Padstow you really ought to see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Padstow can be a difficult process. We recommend you procure professional help from a conveyancer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Padstow lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Alex owned a high value flat in Padstow being marketed with a lease of a little over sixty years left. Alex on an informal basis contacted his freeholder being a well known London-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Alex to invoke his statutory right. Alex procured expert advice and secured an acceptable resolution informally and sell the flat.
In 2013 we were phoned by Mr and Mrs. F Peterson who, having bought a studio apartment in Padstow in August 2000. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Similar properties in Padstow with a long lease were worth £285,000. The average amount of ground rent was £45 billed every twelve months. The lease terminated on 22 January 2097. Having 71 years left we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of fees.
Mr and Mrs. V James bought a studio apartment in Padstow in March 2008. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparable properties in Padstow with 100 year plus lease were in the region of £225,800. The average ground rent payable was £60 invoiced quarterly. The lease ran out on 19 July 2086. Given that there were 60 years remaining we calculated the compensation to the freeholder for the lease extension to be within £24,700 and £28,600 exclusive of fees.