The market value of Pencoed leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate materialy once the remaining term is less than 80 years
Leasehold residencies in Pencoed with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Pencoed,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Pencoed valuers.
After lengthy negotiations with the landlord of her leasehold apartment in Pencoed, Sarah started the lease extension process as the 80 year threshold was quickly coming. The transaction was finalised in March 2009. The freeholder’s fees were kept to an absolute minimum.
In 2009 we were contacted by Ms Alexandra Patel who, having moved into a recently refurbished flat in Pencoed in March 2008. The question was if we could shed any light on how much (approximately) price would be to prolong the lease by 90 years. Comparable flats in Pencoed with an extended lease were valued about £280,000. The mid-range ground rent payable was £55 collected quarterly. The lease ran out in 2104. Having 78 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus professional charges.
In 2014 we were phoned by Mrs Shannon Johnson who, having completed a garden flat in Pencoed in January 1996. The question was if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Identical residencies in Pencoed with a long lease were valued around £186,000. The average amount of ground rent was £65 billed quarterly. The lease terminated in 2084. Having 58 years left we calculated the compensation to the freeholder to extend the lease to be between £24,700 and £28,600 exclusive of expenses.