The market value of Pencader 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 escalate materialy once the unexpired lease term is less than 80 years
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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; |
| 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. |
| Godiva Mortgages | 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 | 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:
|
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with procure 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.
Teddy owned a 2 bedroom apartment in Pencader being marketed with a lease of a few days over fifty eight years unexpired. Teddy on an informal basis approached his freeholder a well known local-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 yearly. No ground rent would be payable on a lease extension were Teddy to exercise his statutory right. Teddy procured expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
Mrs O Robinson bought a garden flat in Pencader in October 1997. We are asked if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparative properties in Pencader with an extended lease were worth £166,400. The mid-range amount of ground rent was £60 invoiced quarterly. The lease finished on 14 May 2080. Considering the 54 years outstanding we estimated the compensation to the landlord for the lease extension to be within £32,300 and £37,400 exclusive of legals.
Last Summer we were phoned by Mr and Mrs. C Scott , who acquired a one bedroom apartment in Pencader in January 2008. The question was if we could estimate the price would likely be to prolong the lease by a further 90 years. Identical properties in Pencader with 100 year plus lease were in the region of £227,800. The average ground rent payable was £45 invoiced per annum. The lease termination date was in 2091. Considering the 65 years left we approximated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of expenses.