Pentraeth residential property held on a long lease is a wasting asset because a leaseholder merely owns the property for a period of years.
Leasehold premises in Pentraeth with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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 conveyancing solicitors that we work with procure Pentraeth 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.
Last year Henry, came perilously close to the 80-year threshold with the lease on his leasehold flat in Pentraeth. Having purchased his home two decades ago, the lease term was of minimal significance. Thankfully, he became aware that he would soon be paying an escalated premium for a lease extension. Henry arranged for a lease extension just under the wire in July. Henry and the landlord who owned the flat above subsequently settled on the final figure of £6,000 . If the lease had slid lower than eighty years, the price would have become more exhorbitant by a minimum £1,025.
In 2012 we were e-mailed by Mr Owen Garcia who, having took over the lease of a garden apartment in Pentraeth in July 2007. We are asked if we could estimate the premium could be to extend the lease by ninety years. Similar properties in Pentraeth with a long lease were valued about £280,000. The mid-range amount of ground rent was £55 billed annually. The lease concluded on 1 September 2103. Given that there were 77 years left we approximated the premium to the landlord for the lease extension to be between £13,300 and £15,400 plus professional charges.
In 2014 we were contacted by Dr P Díaz who, having acquired a first floor flat in Pentraeth in April 1999. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by a further 90 years. Similar premises in Pentraeth with 100 year plus lease were valued around £183,600. The mid-range amount of ground rent was £65 collected annually. The lease elapsed in 2083. Considering the 57 years remaining we calculated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 plus legals.