With a residential leasehold premises in Penrhyndeudraeth, you are actually purchasing an entitlement to live in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably when there are less than eighty years left. Anyone in Penrhyndeudraeth with a lease approaching 81 years unexpired should seriously think of extending it without delay. Once the lease term has below 80 years remaining, under the relevant legislation the landlord can calculate and charge a larger amount, assessed on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold properties in Penrhyndeudraeth with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you increased control over the value of your Penrhyndeudraeth leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Alfie was the the leasehold proprietor of a conversion apartment in Penrhyndeudraeth being sold with a lease of a few days over 61 years left. Alfie informally approached his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Alfie to exercise his statutory right. Alfie procured expert advice and was able to make a more informed judgement and handle with the matter and sell the property.
In 2010 we were phoned by Mr and Mrs. W Roberts who, having took over the lease of a one bedroom flat in Penrhyndeudraeth in May 2002. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Comparable residencies in Penrhyndeudraeth with 100 year plus lease were in the region of £285,000. The mid-range ground rent payable was £55 billed every twelve months. The lease terminated on 12 April 2105. Considering the 79 years remaining we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 plus professional charges.
In 2011 we were phoned by Dr D Williams who, having took over the lease of a one bedroom apartment in Penrhyndeudraeth in April 2007. We are asked if we could approximate the premium could be for a 90 year lease extension. Similar residencies in Penrhyndeudraeth with an extended lease were valued around £193,400. The average ground rent payable was £65 invoiced every twelve months. The lease finished in 2085. Having 59 years as a residual term we calculated the premium to the landlord for the lease extension to be within £21,900 and £25,200 exclusive of legals.