It’s a harsh truth that a Pentyrch residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Pentyrch property prices.Once your lease gets to 85ish years, you need to 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 slips lower than 80 years - otherwise a higher premium will be payable. Most flat owners in Pentyrch will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally considered that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| Godiva Mortgages | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Pentyrch 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.
Off the back of unsuccessful correspondence with the freeholder of her purpose-built apartment in Pentyrch, Alexandra started the lease extension process as the eighty year deadline was fast advancing. The legal work was concluded in October 2007. The freeholder’s costs were negotiated to under 600 pounds.
Last Winter we were phoned by Mr and Mrs. V Campbell , who was assigned a lease of a newly refurbished apartment in Pentyrch in April 2011. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical homes in Pentyrch with an extended lease were valued around £275,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease ran out on 23 February 2103. Given that there were 77 years remaining we approximated the premium to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of expenses.
In 2011 we were contacted by Dr Sebastian Norbert who, having purchased a one bedroom flat in Pentyrch in July 1997. We are asked if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Identical homes in Pentyrch with an extended lease were in the region of £183,600. The average amount of ground rent was £65 billed quarterly. The lease came to a finish in 2083. Given that there were 57 years outstanding we calculated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 plus expenses.