The market value of a leasehold property in Pencoed is impacted by how long the lease has left to run. If it is close to or less than eighty years you should foresee problems on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be concluded prior to the eighty year threshold. Leasehold Reform legislation entitles Pencoed qualifying lessees to an additional term of 90 years over and above the existing term, at a notional rent (no ground rent). The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Pencoed with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 be at least 75 years plus the term of the mortgage 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. |
Engaging our service will provide you better control over the value of your Pencoed leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Evan, came critically near to the 80-year threshold with the lease on his two bedroom apartment in Pencoed. In buying his property twenty years previously, the length of the lease was of minimal bearing. Fortunately, he realised he needed to take steps soon on Extending the lease. Evan was able to extend his lease at the eleventh hour last May. Evan and the landlord eventually settled on a premium of £5,000 . If he had missed the deadline, the price would have escalated by a minimum £925.
Ms T Roberts purchased a studio flat in Pencoed in April 2004. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Comparable residencies in Pencoed with an extended lease were valued around £210,600. The average amount of ground rent was £45 invoiced every twelve months. The lease ended in 2088. Taking into account 62 years unexpired we calculated the premium to the landlord to extend the lease to be between £18,100 and £20,800 exclusive of expenses.
Last Winter we were called by Mrs Phoebe Davis , who took over the lease of a first floor flat in Pencoed in April 2010. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Comparable residencies in Pencoed with a long lease were valued around £260,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease elapsed on 12 September 2098. Given that there were 72 years outstanding we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.