It’s an underpublicised truth that a Penmaenmawr residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Penmaenmawr property prices.Where your lease has approximately 90 years left, you should 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 dips under eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Penmaenmawr will be able to extend under the legislation; however a conveyancer will be able to confirm 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 is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to 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. |
| Bank of Scotland | 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Engaging our service will provide you increased control over the value of your Penmaenmawr leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted discussions with the freeholder of her ground floor flat in Penmaenmawr, Caitlin initiated the lease extension process as the eighty year threshold was rapidly coming. The transaction was finalised in April 2006. The freeholder’s costs were negotiated to a tad over 550 GBP.
Mrs Hannah Morel bought a purpose-built apartment in Penmaenmawr in July 2004. The question was if we could estimate the compensation to the landlord could be to prolong the lease by 90 years. Similar residencies in Penmaenmawr with a long lease were valued around £270,000. The mid-range ground rent payable was £55 collected yearly. The lease finished in 2100. Taking into account 74 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.
Mrs C Díaz acquired a studio flat in Penmaenmawr in August 2000. The question was if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Similar homes in Penmaenmawr with a long lease were in the region of £166,400. The average amount of ground rent was £60 invoiced every twelve months. The lease came to a finish in 2080. Given that there were 54 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 plus professional charges.