There is no doubt about it a leasehold property in Pencoed is a wasting asset as a result of the diminishing lease term. Where the lease has, more than one hundred years remaining then this decrease may be fractional however there will become a point in time when a lease has fewer than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary logic behind why you should extend the lease sooner rather than later. The majority of flat owners in Pencoed will qualify for this right; however a conveyancer should be able to advise whether you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
Lender | Requirement |
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Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
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. |
National Westminster Bank | Mortgage term plus 30 years. |
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. |
Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Pencoed leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Noah owned a studio flat in Pencoed on the market with a lease of just over sixty years outstanding. Noah informally spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Noah to exercise his statutory right. Noah obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and sell the flat.
In 2013 we were approached by Mrs Grace Torres who, having moved into a garden flat in Pencoed in July 2012. We are asked if we could estimate the price would be for a 90 year lease extension. Identical flats in Pencoed with a long lease were in the region of £176,200. The mid-range amount of ground rent was £65 invoiced quarterly. The lease came to a finish in 2081. Given that there were 56 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £29,500 and £34,000 exclusive of expenses.
Mr and Mrs. S Fournier purchased a garden flat in Pencoed in January 1995. The question was if we could approximate the premium could be for a 90 year extension to my lease. Identical homes in Pencoed with an extended lease were valued about £237,600. The mid-range ground rent payable was £45 billed monthly. The lease finished in 2092. Given that there were 67 years remaining we estimated the compensation to the landlord to extend the lease to be within £11,400 and £13,200 not including professional charges.