Unfortunately that a Pentyrch residential lease is a wasting 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 deflation being disguised by increases in the Pentyrch 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 under eighty years - otherwise a higher premium will be due. The majority of flat owners in Pentyrch will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold residencies in Pentyrch with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 procure 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 conveyancing solicitor we work with provide it.
In the wake of 9 months of lengthy correspondence with the landlord of her leasehold apartment in Pentyrch, Alexandra initiated the lease extension process just as the lease was nearing the critical eighty-year deadline. The lease extension completed in February 2012. The freeholder’s fees were negotiated to a tad over 450 GBP.
In 2014 we were e-mailed by Mr and Mrs. G Davis who, having took over the lease of a purpose-built flat in Pentyrch in February 2012. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Similar properties in Pentyrch with an extended lease were in the region of £176,200. The average ground rent payable was £65 collected every twelve months. The lease elapsed on 28 May 2082. Given that there were 56 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 not including costs.
Dr Katherine Peterson acquired a basement apartment in Pentyrch in September 2000. The dilemma was if we could estimate the premium would likely be for a ninety year extension to my lease. Similar residencies in Pentyrch with an extended lease were in the region of £242,600. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease came to a finish in 2093. Having 67 years remaining we approximated the compensation to the freeholder to extend the lease to be between £11,400 and £13,200 not including expenses.