Pembroke leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Pembroke tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Pembroke you really ought to see if your lease has between 70 and 90 years left. There are compelling reasons why a Pembroke leaseholder with a lease having around 80 years unexpired should take steps to make sure that a lease extension is effected without delay
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the property will be worth the same as a freehold for many years in the future.
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Pembroke leasehold, as your property will be more valuable and saleable in relation to the 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.
Trailing protracted discussions with the landlord of her garden apartment in Pembroke, Elizabeth initiated the lease extension process as the eighty year deadline was fast advancing. The transaction was finalised in October 2015. The freeholder’s charges were restricted to below 550 GBP.
Mr O Miller acquired a one bedroom flat in Pembroke in August 2002. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Comparative homes in Pembroke with 100 year plus lease were worth £232,800. The average amount of ground rent was £45 collected monthly. The lease ended on 7 April 2090. Given that there were 65 years remaining we approximated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of expenses.
Dr Alfie Ward owned a one bedroom flat in Pembroke in March 2009. The question was if we could shed any light on how much (roughly) premium would be to extend the lease by ninety years. Comparative residencies in Pembroke with a long lease were worth £275,000. The mid-range ground rent payable was £55 billed yearly. The lease elapsed on 3 August 2101. Taking into account 76 years left we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus expenses.