Pontardawe 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 gets more expensive. Legislation has been in place for sometime now allowing qualifying Pontardawe residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Pontardawe you must check if your lease has between 70 and ninety years left. There are good reasons why a Pontardawe flat owner with a lease having around eighty years remaining should take steps to make sure that a lease extension is actioned without delay
Leasehold properties in Pontardawe with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Pontardawe,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Pontardawe valuers.
Liam was the the leasehold owner of a studio apartment in Pontardawe on the market with a lease of fraction over 61 years left. Liam informally contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Liam to exercise his statutory right. Liam obtained expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
In 2010 we were contacted by Mr and Mrs. P Davies who, having acquired a one bedroom flat in Pontardawe in May 2000. The dilemma was if we could estimate the premium would be to prolong the lease by 90 years. Identical premises in Pontardawe with a long lease were valued about £275,000. The mid-range amount of ground rent was £55 collected yearly. The lease finished on 15 September 2101. Taking into account 76 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.
Mr and Mrs. O Wright acquired a newly refurbished apartment in Pontardawe in November 2011. We are asked if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Comparative premises in Pontardawe with an extended lease were valued around £176,200. The average ground rent payable was £65 invoiced every twelve months. The lease terminated on 15 May 2081. Considering the 56 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £29,500 and £34,000 not including expenses.