It’s a harsh certainty that a Pencader residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Pencader property market.Once your lease gets to 85ish years, 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 falls below 80 years - otherwise a higher amount will be payable. Most leasehold owners in Pencader will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold premises in Pencader with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Pencader 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.
Two years ago Aarav, started to get near to the eighty-year mark with the lease on his garden flat in Pencader. Having purchased his home 19 years previously, the unexpired term was of little importance. As luck would have it, he realised he would soon be paying an inflated amount for a lease extension. Aarav arranged for a lease extension just under the wire last June. Aarav and the freeholder ultimately settled on sum of £6,000 . If he had missed the deadline, the amount would have gone up by at least £1,125.
Last Winter we were contacted by Dr Y Hall , who was assigned a lease of a ground floor flat in Pencader in September 1996. The question was if we could approximate the price would likely be for a 90 year extension to my lease. Identical flats in Pencader with a long lease were valued about £173,800. The average amount of ground rent was £60 collected yearly. The lease concluded on 22 May 2081. Considering the 55 years outstanding we estimated the premium to the landlord to extend the lease to be within £31,400 and £36,200 not including professional charges.
In 2011 we were phoned by Mrs Jodie James who, having bought a ground floor flat in Pencader in September 1996. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Identical homes in Pencader with an extended lease were in the region of £235,200. The mid-range ground rent payable was £45 collected every twelve months. The lease expiry date was in 2092. Taking into account 66 years unexpired we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus legals.