Helston leases on domestic properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. Eighty years is a significant number: when the remaining term of a lease dips below this level then you start incurring an additional element called marriage value. Flat owners in Helston will usually be legally entitled to a lease extension; however a solicitor should be able confirm if you qualify. In some situations you may not qualify. There are also strict timetables and formalities to comply with once the process is initiated so it’s best to be guided by a conveyancer during the process.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Chelsea 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. |
| 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. |
| 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. |
| 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 conveyancers that we work with handle Helston 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 lawyer we work with provide it.
Connor owned a conversion flat in Helston being marketed with a lease of just over 72 years left. Connor informally approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Connor to exercise his statutory right. Connor procured expert legal guidance and secured satisfactory deal without resorting to tribunal and readily saleable.
In 2014 we were called by Mrs Shannon Young who, having acquired a basement apartment in Helston in January 2001. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Similar flats in Helston with a long lease were worth £250,400. The mid-range ground rent payable was £65 billed quarterly. The lease elapsed on 28 October 2089. Taking into account 64 years remaining we estimated the compensation to the freeholder for the lease extension to be within £19,000 and £22,000 plus fees.
In 2009 we were e-mailed by Mr R Jones who, having took over the lease of a studio flat in Helston in February 2007. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by 90 years. Comparative properties in Helston with an extended lease were worth £189,000. The average amount of ground rent was £55 billed quarterly. The lease terminated in 2078. Taking into account 53 years as a residual term we approximated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus professional charges.