For anyone whose Pencader home is held on a long lease, the message is clear – if you ignore the situation, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold premises in Pencader with in excess of 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancing solicitors 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 lawyer we work with provide it.
During the course of the last few months Harry, started to get close to the eighty-year mark with the lease on his first floor apartment in Pencader. Having purchased his home 18 years previously, the lease term was of minimal significance. As luck would have it, he recognised he would soon be paying an inflated amount for a lease extension. Harry was able to extend his lease just in the nick of time last January. Harry and the freeholder via the management company in the end settled on sum of £5,000 . If he not met the deadline, the sum would have become more costly by a minimum £975.
Last Summer we were e-mailed by Dr Alfie Sharif , who was assigned a lease of a newly refurbished flat in Pencader in November 2005. The question was if we could approximate the premium could be to prolong the lease by ninety years. Identical flats in Pencader with 100 year plus lease were worth £270,000. The average ground rent payable was £55 collected monthly. The lease concluded on 16 August 2099. Considering the 75 years unexpired we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including fees.
Mr and Mrs. K Cox was assigned a lease of a newly refurbished apartment in Pencader in August 2008. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year extension to my lease. Comparative homes in Pencader with an extended lease were valued about £173,800. The average amount of ground rent was £65 invoiced every twelve months. The lease ended in 2079. Having 55 years unexpired we estimated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 exclusive of legals.