It’s an underpublicised truth that a Pencoed residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Pencoed property market.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher premium will be payable. Most flat owners in Pencoed will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Pencoed can be a difficult process. We recommend you get professional help from a conveyancer and surveyor 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 dealing with Pencoed lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Oliver owned a conversion flat in Pencoed being sold with a lease of just over sixty years remaining. Oliver on an informal basis approached his freeholder a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £200 yearly. No ground rent would be payable on a lease extension were Oliver to exercise his statutory right. Oliver procured expert advice and secured satisfactory deal informally and ending up with a market value flat.
In 2012 we were called by Dr Nathan Rose who, having took over the lease of a one bedroom flat in Pencoed in June 2010. We are asked if we could estimate the price could be for a ninety year lease extension. Comparable residencies in Pencoed with 100 year plus lease were in the region of £250,000. The average amount of ground rent was £50 collected every twelve months. The lease ended on 26 May 2096. Having 70 years unexpired we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of expenses.
In 2010 we were e-mailed by Mr and Mrs. L Murphy who, having completed a basement apartment in Pencoed in August 2003. We are asked if we could shed any light on how much (roughly) price would likely be to prolong the lease by 90 years. Comparable residencies in Pencoed with 100 year plus lease were valued about £246,800. The mid-range ground rent payable was £60 collected yearly. The lease ran out in 2076. Taking into account 50 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £44,700 and £51,600 not including legals.