Penyffordd leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Penyffordd tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Penyffordd you should check if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Penyffordd with in excess of 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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 saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Leon was the the leasehold owner of a conversion flat in Penyffordd being marketed with a lease of a few days over 59 years unexpired. Leon informally spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Leon to invoke his statutory right. Leon procured expert advice and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
In 2013 we were e-mailed by Mr and Mrs. F Bertrand who, having moved into a ground floor apartment in Penyffordd in September 2000. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by 90 years. Comparable premises in Penyffordd with 100 year plus lease were in the region of £191,400. The average amount of ground rent was £55 invoiced yearly. The lease came to a finish in 2079. Taking into account 54 years unexpired we approximated the premium to the freeholder to extend the lease to be within £34,200 and £39,600 not including professional charges.
Ms Y Fournier purchased a purpose-built flat in Penyffordd in June 2004. The question was if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Similar properties in Penyffordd with an extended lease were valued around £295,000. The mid-range amount of ground rent was £45 billed per annum. The lease lapsed in 2099. Given that there were 74 years left we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus expenses.