For those whose Pentwyn flat is held on a long lease, the message is clear – if you ignore the situation, the property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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 conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Jacob, started to get close to the 80-year mark with the lease on his one bedroom apartment in Pentwyn. Having bought his property twenty years previously, the length of the lease was of little importance. As luck would have it, he realised he needed to take action soon on a lease extension. Jacob extended the lease at the eleventh hour in June. Jacob and the landlord in the end settled on the final figure of £5,500 . If he not met the deadline, the sum would have escalated by a minimum £850.
Last year we were called by Mr and Mrs. L Díaz , who purchased a first floor apartment in Pentwyn in October 2000. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Identical premises in Pentwyn with an extended lease were worth £210,000. The average ground rent payable was £50 collected yearly. The lease ran out in 2106. Given that there were 80 years left we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of fees.
Mr and Mrs. T Ricardo purchased a ground floor flat in Pentwyn in January 2007. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Similar properties in Pentwyn with a long lease were in the region of £275,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease ran out on 15 June 2095. Taking into account 69 years unexpired we calculated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of professional charges.