Pembroke leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Pembroke residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Pembroke you would be well advised to check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Pembroke with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Irrespective of whether you are a tenant or a freeholder in Pembroke,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Pembroke valuers.
Half a year ago Charlie, started to get near to the eighty-year mark with the lease on his purpose- built flat in Pembroke. In buying his home two decades ago, the length of the lease was of minimal importance. As luck would have it, he recognised he needed to take action soon on Extending the lease. Charlie was able to extend his lease just under the wire last July. Charlie and the freeholder eventually agreed on the final figure of £6,000 . If he failed to meet the deadline, the amount would have gone up by at least £1,075.
Mr and Mrs. N Collins owned a garden apartment in Pembroke in August 2003. We are asked if we could estimate the price would be for a ninety year extension to my lease. Similar flats in Pembroke with a long lease were valued about £250,000. The average amount of ground rent was £50 collected quarterly. The lease concluded in 2094. Having 68 years outstanding we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.
In 2012 we were approached by Mr and Mrs. G Green who, having purchased a basement apartment in Pembroke in February 2008. The question was if we could estimate the premium could be to prolong the lease by 90 years. Similar homes in Pembroke with 100 year plus lease were valued around £285,000. The mid-range ground rent payable was £55 collected per annum. The lease ran out on 5 April 2105. Taking into account 79 years left we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 plus expenses.