Pentyrch leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Pentyrch enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Pentyrch you must check if your lease has between 70 and ninety years remaining. There are compelling reasons why a Pentyrch flat owner with a lease having around 80 years unexpired should take action to ensure that a lease extension is put in place without delay
Leasehold premises in Pentyrch with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
The conveyancers 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 lawyer we work with provide it.
Luke was the the leasehold owner of a 2 bedroom apartment in Pentyrch on the market with a lease of a few days over 72 years unexpired. Luke on an informal basis spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Luke to exercise his statutory right. Luke procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the property.
In 2013 we were phoned by Mrs Samantha Kelly who, having bought a one bedroom flat in Pentyrch in June 2003. The question was if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Comparable premises in Pentyrch with 100 year plus lease were in the region of £255,000. The average amount of ground rent was £50 collected annually. The lease terminated in 2096. Taking into account 71 years remaining we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.
Dr Emily Reed acquired a basement apartment in Pentyrch in November 1999. The question was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparable premises in Pentyrch with an extended lease were in the region of £254,200. The average ground rent payable was £60 invoiced every twelve months. The lease came to a finish in 2076. Considering the 51 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £43,700 and £50,600 exclusive of expenses.