Penrhyndeudraeth leases on domestic properties are gradually losing value. if your lease has approximately 90 years left, you should start thinking about a lease extension. Eighty years is a significant number: when the remaining term of a lease falls below this level then you start paying an additional element called marriage value. Flat owners in Penrhyndeudraeth will usually qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to check your eligibility. In certain cases you may not be entitled. There are prescribed deadlines and procedures to follow once the process has commenced so it’s wise to be guided by a lawyer during the process.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly 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 |
|---|---|
| Birmingham Midshires | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle 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 conveyancing solicitor we work with provide it.
Teddy was the the leasehold proprietor of a studio flat in Penrhyndeudraeth being sold with a lease of just over 59 years left. Teddy on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 annually. No ground rent would be due on a lease extension were Teddy to exercise his statutory right. Teddy procured expert advice and secured an acceptable resolution without going to tribunal and readily saleable.
Dr Freddie Nguyen owned a studio flat in Penrhyndeudraeth in June 2001. The dilemma was if we could estimate the premium could be for a ninety year lease extension. Similar properties in Penrhyndeudraeth with 100 year plus lease were valued around £200,800. The mid-range amount of ground rent was £65 collected yearly. The lease ran out in 2086. Taking into account 60 years remaining we calculated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of fees.
In 2010 we were approached by Ms Sophie Smith who, having completed a basement flat in Penrhyndeudraeth in January 2005. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Similar homes in Penrhyndeudraeth with a long lease were valued about £260,000. The mid-range amount of ground rent was £50 invoiced annually. The lease termination date was in 2097. Having 71 years as a residual term we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.