For anyone whose Pentwyn property is held on a long lease, the message is clear – if no remedial action is taken, your property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease.
Leasehold properties in Pentwyn with over one hundred 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 home. In such situations there is often little upside in buying the freehold 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you enhanced control over the value of your Pentwyn leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months John, came critically near to the 80-year threshold with the lease on his two bedroom flat in Pentwyn. In buying his flat twenty years ago, the length of the lease was of minimal relevance. As luck would have it, he realised he needed to take action soon on Extending the lease. John extended the lease just under the wire last August. John and the landlord who owned the flat above subsequently settled on a premium of £6,000 . If the lease had dropped below 80 years, the premium would have increased by a minimum £1,025.
In 2012 we were contacted by Dr H Campbell who, having acquired a garden flat in Pentwyn in January 1999. We are asked if we could approximate the price could be to prolong the lease by a further 90 years. Comparable premises in Pentwyn with an extended lease were worth £181,600. The mid-range ground rent payable was £55 invoiced every twelve months. The lease expired on 20 March 2078. Having 52 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £30,400 and £35,200 plus legals.
Dr Aarav Garcia completed a purpose-built flat in Pentwyn in June 2006. The dilemma was if we could shed any light on how much (roughly) price could be to prolong the lease by a further 90 years. Comparable properties in Pentwyn with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £45 billed per annum. The lease terminated in 2098. Having 72 years left we approximated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 plus professional charges.