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Main reasons to commence your Penistone lease extension


Main reasons to commence your Penistone lease extension today:

Increase your lease and increase your Penistone property value

Penistone leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Penistone residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Penistone you really ought to investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value

An extended lease has roughly the same value as a freehold

Leasehold premises in Penistone with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.

Lenders may decide not to lend with a short lease

Mortgage Lenders differ in their lending requirements. Some draw the line at seventy five years remaining on the lease; others may be prepared to lend with anything in excess seventy years. With less than 60 years, it may be problematic to get a mortgage in the first place.

Lender Requirement
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.
Birmingham Midshires 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.

What makes us experts in Penistone lease extensions?

Regardless of whether you are a tenant or a landlord in Penistone,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Penistone valuers.

Penistone Lease Extension Example Cases:

Aaron, Penistone, South Yorkshire

Last year Aaron, started to get near to the 80-year mark with the lease on his garden apartment in Penistone. In buying his property 19 years previously, the unexpired term was of little concern. Fortunately, he noticed he would imminently be paying way over the odds for a lease extension. Aaron arranged for a lease extension just ahead of time in April. Aaron and the freeholder ultimately settled on a premium of £5,000 . If the lease had dipped below eighty years, the amount would have escalated by a minimum £1,150.

Penistone case:

Last year we were phoned by Mr and Mrs. B Díaz , who was assigned a lease of a ground floor apartment in Penistone in March 2006. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Similar residencies in Penistone with an extended lease were in the region of £243,000. The mid-range ground rent payable was £65 billed monthly. The lease expired in 2088. Considering the 63 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 plus legals.

Penistone case:

In 2011 we were approached by Mrs Charlotte Moreau who, having took over the lease of a basement flat in Penistone in August 2000. The question was if we could approximate the premium would likely be for a ninety year lease extension. Identical properties in Penistone with an extended lease were valued about £181,600. The average ground rent payable was £55 invoiced every twelve months. The lease elapsed in 2077. Considering the 52 years left we calculated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 plus fees.