Unfortunately that a Pensysarn residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Pensysarn property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher amount will be due. Most leasehold owners in Pensysarn will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start 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. |
The lawyers that we work with handle Pensysarn 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.
Following protracted negotiations with the freeholder of her basement apartment in Pensysarn, Ellen commenced the lease extension process as the eighty year threshold was fast approaching. The transaction was finalised in July 2007. The freeholder’s charges were negotiated to a tad over 700 GBP.
In 2012 we were contacted by Dr R Wright who, having bought a first floor flat in Pensysarn in May 2005. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar homes in Pensysarn with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £55 invoiced annually. The lease came to a finish on 28 June 2105. Taking into account 79 years outstanding we approximated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 plus fees.
In 2010 we were called by Mr and Mrs. G Martin who, having purchased a recently refurbished flat in Pensysarn in February 2005. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by 90 years. Comparative premises in Pensysarn with an extended lease were worth £193,400. The average ground rent payable was £65 billed quarterly. The lease elapsed on 9 April 2085. Taking into account 59 years unexpired we calculated the premium to the freeholder to extend the lease to be within £21,900 and £25,200 not including expenses.