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 significantly once the remaining term is less than eighty years
It is generally accepted that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Yorkshire 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. |
The lawyers 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.
During the course of the last few months Jake, came perilously near to the 80-year mark with the lease on his one bedroom apartment in Truro. In buying his flat two decades ago, the lease term was of minimal bearing. Thankfully, he realised he would soon be paying way over the odds for Extending the lease. Jake arranged for a lease extension just ahead of time in April. Jake and the freeholder via the managing agents subsequently settled on a premium of £5,000 . If the lease had slid below 80 years, the sum would have increased by at least £950.
In 2011 we were called by Ms Poppy Bennett who, having bought a ground floor apartment in Truro in August 2007. The question was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative premises in Truro with a long lease were valued about £176,200. The mid-range amount of ground rent was £65 billed yearly. The lease end date was in 2082. Given that there were 56 years remaining we estimated the compensation to the landlord to extend the lease to be within £29,500 and £34,000 plus costs.
Mr and Mrs. O Brown owned a basement flat in Truro in May 1996. We are asked if we could estimate the premium would be to extend the lease by 90 years. Comparable properties in Truro with a long lease were in the region of £242,600. The mid-range ground rent payable was £45 collected quarterly. The lease expired on 4 May 2093. Considering the 67 years remaining we estimated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 not including legals.