It’s a harsh certainty that a Penrith residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Penrith property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term falls under eighty years, you will then be required to pay 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 The majority of flat owners in Penrith will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold residencies in Penrith with in excess of 100 years outstanding 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 home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Penrith lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Following protracted correspondence with the freeholder of her one bedroom flat in Penrith, Imogen initiated the lease extension process just as the lease was coming close to the all-important 80-year threshold. The legal work was finalised in July 2012. The landlord’s fees were negotiated to approximately four hundred pounds.
Last Christmas we were called by Mr and Mrs. E Roux , who bought a studio apartment in Penrith in January 2003. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparative homes in Penrith with an extended lease were valued about £295,000. The mid-range amount of ground rent was £50 billed yearly. The lease expiry date was on 24 July 2101. Having 75 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of costs.
In 2009 we were called by Dr Lily Campbell who, having completed a one bedroom flat in Penrith in May 2005. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical premises in Penrith with 100 year plus lease were valued around £250,400. The average amount of ground rent was £65 collected quarterly. The lease elapsed on 25 June 2090. Given that there were 64 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 exclusive of costs.