Penrhyndeudraeth leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Penrhyndeudraeth tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Penrhyndeudraeth you would be well advised to see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent 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 many years in the future.
| 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. |
| 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. |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with undertake Penrhyndeudraeth 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.
Joseph was the the leasehold owner of a conversion apartment in Penrhyndeudraeth on the market with a lease of a little over 59 years remaining. Joseph on an informal basis spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give 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. No ground rent would be payable on a lease extension were Joseph to exercise his statutory right. Joseph procured expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
In 2011 we were contacted by Mr and Mrs. T Fournier who, having took over the lease of a recently refurbished apartment in Penrhyndeudraeth in January 2003. The question was if we could approximate the price would likely be for a 90 year extension to my lease. Identical properties in Penrhyndeudraeth with an extended lease were worth £210,600. The mid-range amount of ground rent was £45 billed yearly. The lease finished on 24 May 2088. Having 62 years left we calculated the compensation to the landlord to extend the lease to be within £18,100 and £20,800 plus legals.
Last Spring we were contacted by Mr and Mrs. P Collins , who moved into a one bedroom flat in Penrhyndeudraeth in August 1998. The dilemma was if we could estimate the price would be for a ninety year extension to my lease. Identical homes in Penrhyndeudraeth with an extended lease were valued about £265,000. The mid-range amount of ground rent was £50 billed per annum. The lease lapsed on 28 May 2099. Considering the 73 years outstanding we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus fees.