It’s a harsh certainty that a Padstow residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Padstow property market.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If the number of years remaining dips under eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Padstow will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold premises in Padstow with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Using our service will provide you increased control over the value of your Padstow leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Isaac, came critically near to the 80-year mark with the lease on his one bedroom flat in Padstow. In buying his property two decades ago, the unexpired term was of little importance. by good luck, he became aware that he would imminently be paying an inflated amount for Extending the lease. Isaac extended the lease just in the nick of time in April. Isaac and the landlord ultimately agreed on a premium of £5,500 . If the lease had slipped lower than 80 years, the premium would have escalated by at least £950.
Last Spring we were contacted by Mr E Gómez , who owned a recently refurbished flat in Padstow in May 2003. We are asked if we could shed any light on how much (roughly) price would likely be to extend the lease by ninety years. Comparable residencies in Padstow with an extended lease were valued around £250,400. The average amount of ground rent was £65 billed annually. The lease elapsed on 23 November 2090. Given that there were 64 years unexpired we approximated the premium to the freeholder to extend the lease to be between £19,000 and £22,000 plus fees.
Dr Elijah Hernández owned a studio apartment in Padstow in November 2004. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Comparative residencies in Padstow with an extended lease were valued about £189,000. The mid-range amount of ground rent was £55 invoiced annually. The lease ended on 15 February 2079. Having 53 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 plus legals.