Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will ordinarily be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Penyffordd. Inevitably, the period of lease left shortens over time. This may pass by relatively unnoticed when the residence has to be sold or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Eligible long lease owners in Penyffordd have the legal entitlement to extend the lease for a further ninety years under the 1993 Leasehold Reform Act. Do give due attention before putting off your Penyffordd lease extension. Holding off the cost now simply increases the price you will ultimately incur for a lease extension
Leasehold residencies in Penyffordd with in excess of 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Retaining our service gives you enhanced control over the value of your Penyffordd leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Winter Evan, started to get near to the eighty-year threshold with the lease on his leasehold flat in Penyffordd. Having bought his home two decades ago, the length of the lease was of no significance. Luckily, he recognised he needed to take steps soon on a lease extension. Evan extended the lease just in the nick of time in September. Evan and the landlord in the end settled on sum of £5,000 . If he failed to meet the deadline, the figure would have increased by a minimum £1,150.
Last month we were phoned by Dr Theo Peterson , who bought a ground floor apartment in Penyffordd in November 2006. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by 90 years. Similar properties in Penyffordd with 100 year plus lease were worth £260,200. The mid-range ground rent payable was £65 collected every twelve months. The lease expired on 6 September 2091. Considering the 66 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £15,200 and £17,600 not including costs.
Last Winter we were e-mailed by Mrs Madeleine Lee , who owned a garden apartment in Penyffordd in October 2002. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Similar flats in Penyffordd with a long lease were worth £198,800. The mid-range amount of ground rent was £55 invoiced quarterly. The lease ended on 6 October 2080. Having 55 years left we approximated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 exclusive of expenses.