Unfortunately that a Pencader residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted 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 considering a lease extension. If lease term drops under 80 years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Pencader will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
Leasehold properties in Pencader with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Using our service will provide you enhanced control over the value of your Pencader leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Ethan was the the leasehold owner of a 2 bedroom flat in Pencader on the market with a lease of fraction over 72 years unexpired. Ethan informally spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Ethan to invoke his statutory right. Ethan obtained expert advice and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
In 2011 we were approached by Dr P Smith who, having moved into a garden apartment in Pencader in June 2004. The question was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar flats in Pencader with a long lease were valued about £242,600. The average amount of ground rent was £45 billed annually. The lease came to a finish in 2093. Taking into account 67 years left we calculated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 plus fees.
In 2010 we were called by Dr D Khan who, having was assigned a lease of a purpose-built flat in Pencader in June 2012. We are asked if we could estimate the premium could be to extend the lease by a further 90 years. Identical premises in Pencader with 100 year plus lease were valued around £280,000. The mid-range ground rent payable was £55 invoiced quarterly. The lease came to a finish on 2 July 2104. Having 78 years left we calculated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 not including legals.