The market value of Truro leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase substantially once the remaining term is less than 80 years
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with undertake Truro 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 conveyancing solicitor we work with provide it.
George owned a studio flat in Truro on the market with a lease of just over sixty years remaining. George informally approached his landlord a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 annually. Ordinarily, ground rent would not be due on a lease extension were George to exercise his statutory right. George procured expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
Last year we were called by Dr Aiden Davies , who acquired a one bedroom apartment in Truro in February 2007. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Comparable homes in Truro with an extended lease were worth £265,000. The average amount of ground rent was £55 collected yearly. The lease ended on 10 September 2099. Given that there were 74 years left we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.
In 2012 we were approached by Ms J Richardson who, having bought a recently refurbished apartment in Truro in August 2012. The dilemma was if we could estimate the price could be to extend the lease by 90 years. Comparable properties in Truro with 100 year plus lease were worth £166,400. The average ground rent payable was £60 invoiced per annum. The lease termination date was in 2079. Taking into account 54 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £32,300 and £37,400 exclusive of legals.