Unfortunately that a Pencader residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Pencader property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If the number of years remaining falls below 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Pencader will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some cases 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 conveyancing solicitor from beginning to end of the process.
Leasehold residencies in Pencader with over one hundred years left 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 circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
The conveyancers that we work with undertake Pencader 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.
Nathan owned a studio apartment in Pencader being sold with a lease of a little over 59 years unexpired. Nathan on an informal basis approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Nathan to invoke his statutory right. Nathan obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the property.
In 2010 we were approached by Dr Lucas Martinez who, having completed a one bedroom flat in Pencader in August 1999. The question was if we could approximate the price could be for a ninety year lease extension. Similar premises in Pencader with 100 year plus lease were worth £260,000. The mid-range ground rent payable was £50 invoiced annually. The lease finished in 2096. Given that there were 73 years remaining we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of legals.
Last month we were approach by Mr and Mrs. W Laurent , who took over the lease of a first floor flat in Pencader in March 2012. The question was if we could approximate the premium would be for a 90 year extension to my lease. Identical properties in Pencader with a long lease were valued about £264,000. The mid-range amount of ground rent was £60 invoiced quarterly. The lease expired on 12 August 2076. Considering the 53 years outstanding we calculated the premium to the landlord for the lease extension to be within £37,100 and £42,800 exclusive of fees.