Unfortunately that a Pencoed residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Pencoed property market.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher amount will be due. Most leasehold owners in Pencoed will be able to extend under the legislation; however a lawyer will be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
Using our service will provide you better control over the value of your Pencoed leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of lengthy correspondence with the landlord of her first floor flat in Pencoed, Samantha started the lease extension process just as her lease was coming close to the critical 80-year threshold. The legal work was finalised in September 2015. The freeholder’s charges were kept to an absolute minimum.
In 2013 we were called by Mr and Mrs. P Scott who, having purchased a basement apartment in Pencoed in October 1999. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by a further 90 years. Comparative flats in Pencoed with 100 year plus lease were valued around £270,000. The average ground rent payable was £55 collected quarterly. The lease end date was in 2101. Having 76 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including legals.
In 2012 we were phoned by Ms I Phillips who, having moved into a studio flat in Pencoed in January 2003. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparable properties in Pencoed with a long lease were in the region of £176,200. The mid-range amount of ground rent was £65 billed annually. The lease ended on 6 May 2081. Having 56 years outstanding we approximated the compensation to the landlord to extend the lease to be within £29,500 and £34,000 exclusive of professional charges.