Porthcawl leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Porthcawl tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Porthcawl you would be well advised to see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold residencies in Porthcawl with in excess of one hundred years remaining on the lease are often 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 upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Porthcawl,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Porthcawl valuers.
Jayden owned a 2 bedroom flat in Porthcawl being marketed with a lease of fraction over 59 years left. Jayden informally spoke with his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder 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 £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Jayden to exercise his statutory right. Jayden procured expert advice and was able to make an informed decision and deal with the matter and sell the flat.
Mr Ibrahim Parker completed a studio flat in Porthcawl in June 2006. The question was if we could approximate the price could be to prolong the lease by 90 years. Comparative properties in Porthcawl with a long lease were valued around £267,600. The average amount of ground rent was £65 collected monthly. The lease expired on 22 July 2092. Given that there were 67 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £14,300 and £16,400 not including legals.
Mrs K Khan was assigned a lease of a newly refurbished apartment in Porthcawl in September 2005. The question was if we could estimate the premium would likely be to extend the lease by ninety years. Identical flats in Porthcawl with an extended lease were worth £201,200. The average ground rent payable was £55 billed per annum. The lease elapsed in 2081. Considering the 56 years unexpired we approximated the premium to the freeholder to extend the lease to be between £31,400 and £36,200 exclusive of expenses.