It’s an underpublicised truth that a Porthleven residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Porthleven property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Porthleven will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some cases 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 conveyancer for the duration of the formalities.
Leasehold properties in Porthleven with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Porthleven 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.
During the course of the last few months Austin, started to get close to the eighty-year threshold with the lease on his two bedroom apartment in Porthleven. In buying his flat 19 years previously, the unexpired term was of little importance. by good luck, he became aware that he needed to take action soon on a lease extension. Austin arranged for a lease extension at the eleventh hour in January. Austin and the freeholder in the end agreed on sum of £5,000 . If the lease had slipped to less than 80 years, the amount would have increased by at least £1,150.
Mr and Mrs. C David moved into a ground floor apartment in Porthleven in May 2004. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparative homes in Porthleven with a long lease were in the region of £256,600. The average ground rent payable was £60 billed quarterly. The lease came to a finish on 11 January 2078. Taking into account 52 years left we estimated the compensation to the freeholder for the lease extension to be within £39,000 and £45,000 not including professional charges.
Last Summer we were phoned by Mr and Mrs. U Walker , who acquired a garden apartment in Porthleven in August 1995. The question was if we could estimate the price could be to prolong the lease by ninety years. Similar properties in Porthleven with an extended lease were worth £218,000. The average ground rent payable was £45 invoiced every twelve months. The lease ran out on 18 July 2089. Considering the 63 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £17,100 and £19,800 plus professional charges.