The value of Penmaenmawr leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the unexpired lease term is less than eighty years
Leasehold properties in Penmaenmawr with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Penmaenmawr lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Half a year ago Alfie, started to get near to the eighty-year threshold with the lease on his purpose- built flat in Penmaenmawr. Having purchased his property twenty years ago, the unexpired term was of no interest. by good luck, he recognised he would imminently be paying way over the odds for Extending the lease. Alfie was able to extend his lease just under the wire in September. Alfie and the landlord who owned the flat above eventually settled on the final figure of £5,000 . If he not met the deadline, the premium would have become more exhorbitant by a minimum £850.
In 2010 we were e-mailed by Dr Amelia Lambert who, having purchased a ground floor apartment in Penmaenmawr in September 2002. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparative premises in Penmaenmawr with an extended lease were worth £264,000. The average amount of ground rent was £60 billed every twelve months. The lease elapsed on 23 September 2078. Taking into account 53 years remaining we calculated the compensation to the landlord to extend the lease to be within £37,100 and £42,800 exclusive of costs.
Mr Alfie Davies bought a basement flat in Penmaenmawr in November 2005. The question was if we could approximate the premium would likely be for a 90 year lease extension. Identical homes in Penmaenmawr with an extended lease were valued about £225,400. The mid-range amount of ground rent was £45 billed yearly. The lease lapsed on 20 May 2089. Considering the 64 years outstanding we approximated the compensation to the landlord to extend the lease to be within £15,200 and £17,600 plus professional charges.