The basic rule is, all other factors being equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Penrhyn Bay have the right to extend the lease for an additional ninety years under statute. Please think carefully before delaying your Penrhyn Bay lease extension. Shelving that expense now simply escalates the amount you will ultimately have to pay to extend the lease.
It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Using our service will provide you increased control over the value of your Penrhyn Bay leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
William owned a studio flat in Penrhyn Bay being sold with a lease of just over fifty eight years left. William on an informal basis approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were William to exercise his statutory right. William procured expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
In 2011 we were phoned by Dr Madeleine Baker who, having purchased a basement flat in Penrhyn Bay in April 2011. The question was if we could approximate the premium could be to prolong the lease by a further 90 years. Comparative properties in Penrhyn Bay with an extended lease were in the region of £243,000. The average ground rent payable was £65 collected per annum. The lease lapsed on 6 June 2089. Given that there were 63 years outstanding we approximated the premium to the freeholder to extend the lease to be between £20,000 and £23,000 plus fees.
Ms S Lambert moved into a basement flat in Penrhyn Bay in August 2002. We are asked if we could estimate the premium would be for a ninety year lease extension. Comparative residencies in Penrhyn Bay with 100 year plus lease were valued about £181,600. The mid-range ground rent payable was £55 billed yearly. The lease elapsed on 17 April 2078. Given that there were 52 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 exclusive of professional charges.