When it comes to domestic leasehold property in Pentwyn, you are in fact renting it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately greater especially once there are fewer than eighty years remaining. Leasehold owners in Pentwyn with a lease approaching 81 years remaining should seriously consider extending it sooner rather than later. Once the lease term has under 80 years remaining, under the relevant legislation the landlord is entitled to calculate and charge a larger amount, based on a technical multiplication, known as “marriage value” which is payable.
Leasehold residencies in Pentwyn with over one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth 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 service charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
Irrespective of whether you are a tenant or a freeholder in Pentwyn,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Pentwyn valuers.
John owned a high value apartment in Pentwyn being marketed with a lease of just over 61 years remaining. John informally approached his landlord being a well known local-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 per annum. Ordinarily, ground rent would not be payable on a lease extension were John to exercise his statutory right. John procured expert advice and was able to make an informed decision and handle with the matter and readily saleable.
Mr and Mrs. T Kelly moved into a one bedroom apartment in Pentwyn in February 2002. We are asked if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Similar premises in Pentwyn with 100 year plus lease were worth £216,000. The average amount of ground rent was £60 collected every twelve months. The lease ended on 2 February 2083. Given that there were 58 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 not including professional charges.
Mrs Sophie Sánchez moved into a one bedroom apartment in Pentwyn in November 2003. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Similar properties in Pentwyn with a long lease were in the region of £200,000. The average amount of ground rent was £50 billed per annum. The lease finished in 2103. Given that there were 78 years outstanding we estimated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus professional charges.