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 gets more expensive. It is the case that most Pembroke tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Pembroke you must see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake Pembroke lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
In 2014 Sam, started to get near to the 80-year threshold with the lease on his ground floor apartment in Pembroke. Having bought his home twenty years ago, the length of the lease was of minimal significance. As luck would have it, he became aware that he needed to take action soon on Extending the lease. Sam arranged for a lease extension just under the wire last April. Sam and the landlord eventually settled on sum of £6,000 . If he failed to meet the deadline, the amount would have escalated by at least £1,050.
In 2014 we were called by Dr H Roberts who, having acquired a purpose-built apartment in Pembroke in March 2011. The question was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical premises in Pembroke with a long lease were worth £176,200. The average ground rent payable was £65 collected every twelve months. The lease came to a finish on 9 April 2082. Taking into account 56 years remaining we approximated the compensation to the landlord to extend the lease to be between £29,500 and £34,000 plus professional charges.
Ms Rosie Campbell completed a one bedroom apartment in Pembroke in June 2010. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by a further 90 years. Identical premises in Pembroke with 100 year plus lease were valued about £242,600. The mid-range amount of ground rent was £45 invoiced per annum. The lease concluded on 6 March 2093. Taking into account 67 years as a residual term we calculated the premium to the landlord for the lease extension to be between £11,400 and £13,200 not including expenses.