When it comes to long leasehold property in Pencoed, you are actually purchasing an entitlement to live in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are less than eighty years left. Residents in Pencoed with a lease nearing 81 years remaining should seriously think of extending it as soon as possible. Once a lease has less than eighty years left, under the relevant legislation the freeholder is entitled to calculate and charge a larger amount, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold properties in Pencoed with more than 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
Lease extensions in Pencoed can be a difficult process. We recommend you procure guidance from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Pencoed lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Subsequent to lengthy negotiations with the landlord of her purpose-built flat in Pencoed, Nicole initiated the lease extension process as the 80 year mark was quickly nearing. The transaction was finalised in February 2007. The freeholder’s charges were negotiated to slightly above 700 GBP.
In 2011 we were approached by Ms B Cook who, having completed a one bedroom apartment in Pencoed in August 2001. We are asked if we could approximate the price could be for a 90 year lease extension. Identical properties in Pencoed with an extended lease were worth £260,000. The mid-range ground rent payable was £50 collected every twelve months. The lease expiry date was in 2097. Taking into account 71 years remaining we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of legals.
In 2013 we were e-mailed by Dr Aarav Morel who, having purchased a basement flat in Pencoed in March 1995. The dilemma was if we could estimate the premium would likely be to extend the lease by a further 90 years. Comparative residencies in Pencoed with 100 year plus lease were valued about £254,200. The average ground rent payable was £60 invoiced quarterly. The lease ran out on 18 February 2077. Taking into account 51 years outstanding we calculated the premium to the landlord for the lease extension to be within £43,700 and £50,600 not including professional charges.