Unfortunately that a Pentyrch residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. 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 Pentyrch property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term dips under 80 years, you will then be required to pay 50% 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 additional value that a lease extension will add the property The majority of flat owners in Pentyrch will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
| 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 conveyancing solicitors that we work with handle Pentyrch 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 conveyancer we work with provide it.
After lengthy negotiations with the freeholder of her one bedroom flat in Pentyrch, Abbie initiated the lease extension process as the eighty year threshold was quickly nearing. The legal work was concluded in August 2011. The freeholder’s costs were kept to an absolute minimum.
Last Spring we were called by Dr B Fournier , who completed a ground floor apartment in Pentyrch in March 2000. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar premises in Pentyrch with an extended lease were valued around £246,800. The mid-range ground rent payable was £60 billed monthly. The lease termination date was on 14 November 2076. Having 50 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £44,700 and £51,600 exclusive of professional charges.
In 2014 we were contacted by Mrs Zoe Khan who, having purchased a one bedroom flat in Pentyrch in June 2002. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Comparable flats in Pentyrch with 100 year plus lease were worth £208,200. The average ground rent payable was £65 billed per annum. The lease expired on 9 January 2087. Taking into account 61 years remaining we estimated the premium to the freeholder for the lease extension to be between £19,000 and £22,000 plus professional charges.