It’s a harsh truth that a Penrith residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Penrith property market.Once your lease nears 85ish years, you need to start considering a lease extension. If the number of years remaining falls below eighty years, you will then be required to pay 50% 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 flat owners in Penrith will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold properties in Penrith with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you enhanced control over the value of your Penrith leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy discussions with the landlord of her one bedroom apartment in Penrith, Mollie initiated the lease extension process just as her lease was coming close to the critical 80-year mark. The lease extension was concluded in July 2013. The landlord’s charges were kept to an absolute minimum.
In 2014 we were approached by Mr and Mrs. N Bailey who, having purchased a first floor flat in Penrith in October 2002. 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 premises in Penrith with 100 year plus lease were valued about £257,800. The mid-range ground rent payable was £65 invoiced monthly. The lease terminated in 2091. Given that there were 65 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of professional charges.
Last Spring we were contacted by Dr W Cox , who was assigned a lease of a one bedroom flat in Penrith in September 1999. We are asked if we could approximate the price would be for a 90 year lease extension. Identical flats in Penrith with a long lease were worth £191,400. The average amount of ground rent was £55 invoiced per annum. The lease expiry date was in 2080. Having 54 years unexpired we approximated the premium to the freeholder for the lease extension to be within £34,200 and £39,600 not including expenses.