The market value of Penllergaer leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase substantially once the remaining term is less than eighty years
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Penllergaer,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Penllergaer valuers.
Edward owned a conversion flat in Penllergaer being sold with a lease of just over 61 years left. Edward informally contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Edward to exercise his statutory right. Edward obtained expert advice and secured satisfactory deal without going to tribunal and readily saleable.
Dr Rosie Thompson owned a studio apartment in Penllergaer in September 2005. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Comparable flats in Penllergaer with a long lease were worth £233,200. The average ground rent payable was £60 invoiced quarterly. The lease elapsed on 18 October 2086. Considering the 61 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £22,800 and £26,400 plus costs.
Mr I Ramírez completed a basement apartment in Penllergaer in July 2012. We are asked if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Similar properties in Penllergaer with an extended lease were in the region of £171,800. The mid-range ground rent payable was £55 billed every twelve months. The lease ended on 9 August 2075. Considering the 50 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 exclusive of legals.