Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Pentyrch. Clearly, the length of lease left reduces over time. This may slip by relatively unnoticed when the flat or house has to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease. Eligible leaseholders in Pentyrch have the legal entitlement to extend the lease for an additional 90 years in accordance with the 1993 Leasehold Reform Act. You should give careful deliberation before putting off your Pentyrch lease extension. Putting off the cost now simply increases the price you will ultimately incur to extend your lease
It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
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 conveyancing solicitor we work with provide it.
Subsequent to lengthy discussions with the freeholder of her basement flat in Pentyrch, Alisha commenced the lease extension process as the 80 year mark was rapidly advancing. The transaction completed in June 2012. The freeholder’s charges were kept to an absolute minimum.
Mrs N Clark acquired a one bedroom apartment in Pentyrch in May 2000. We are asked if we could approximate the price would likely be for a 90 year lease extension. Comparable properties in Pentyrch with a long lease were valued around £176,200. The average ground rent payable was £65 collected every twelve months. The lease ran out on 14 March 2081. Having 56 years left we estimated the premium to the landlord to extend the lease to be within £29,500 and £34,000 exclusive of legals.
Ms A Díaz was assigned a lease of a studio flat in Pentyrch in February 2002. We are asked if we could shed any light on how much (roughly) price could be to prolong the lease by ninety years. Similar flats in Pentyrch with a long lease were worth £242,600. The mid-range ground rent payable was £45 collected every twelve months. The lease lapsed in 2092. Taking into account 67 years left we approximated the compensation to the landlord to extend the lease to be within £11,400 and £13,200 exclusive of professional charges.