The re-sale value of a leasehold property in Porthcawl depends on how long the lease has left to run. If it is close to or less than eighty years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years remaining so that a lease extension can be concluded ahead of the eighty year threshold. Current legislation entitles Porthcawl qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Porthcawl 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 situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Porthcawl 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.
Following lengthy correspondence with the landlord of her ground floor apartment in Porthcawl, Ellie initiated the lease extension process as the 80 year mark was swiftly approaching. The lease extension was finalised in May 2010. The freeholder’s fees were kept to an absolute minimum.
In 2013 we were contacted by Ms H Moreau who, having bought a garden flat in Porthcawl in June 2000. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Comparative flats in Porthcawl with a long lease were in the region of £250,400. The average ground rent payable was £65 billed quarterly. The lease finished on 23 May 2090. Having 64 years outstanding we calculated the compensation to the landlord for the lease extension to be between £19,000 and £22,000 not including professional charges.
In 2014 we were approached by Mr N Torres who, having moved into a one bedroom apartment in Porthcawl in May 2007. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Identical residencies in Porthcawl with a long lease were valued around £184,000. The average amount of ground rent was £55 billed every twelve months. The lease concluded on 16 October 2079. Given that there were 53 years unexpired we calculated the premium to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of costs.