Unfortunately that a Pontarddulais 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 Pontarddulais property market.Once your lease gets to 85ish years, you should start thinking about 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 dips under eighty years - otherwise a higher premium will be payable. The majority of flat owners in Pontarddulais will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety 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 are not acceptable. 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; |
| Chelsea 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancing solicitors that we work with handle Pontarddulais 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.
18 months ago Jacob, came dangerously near to the 80-year mark with the lease on his leasehold apartment in Pontarddulais. In buying his flat two decades ago, the unexpired term was of minimal relevance. Fortunately, he noticed he needed to take steps soon on Extending the lease. Jacob was able to extend his lease just ahead of time in June. Jacob and the landlord who owned the flat above ultimately settled on sum of £6,000 . If he had missed the deadline, the figure would have gone up by at least £1,100.
Mr and Mrs. V Mitchell owned a studio apartment in Pontarddulais in March 2009. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Identical residencies in Pontarddulais with a long lease were valued around £210,600. The average amount of ground rent was £45 invoiced yearly. The lease ended in 2088. Given that there were 62 years left we approximated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 plus legals.
Mr and Mrs. H Laurent took over the lease of a basement flat in Pontarddulais in July 1995. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Comparable homes in Pontarddulais with an extended lease were valued about £265,000. The average amount of ground rent was £50 collected yearly. The lease terminated in 2099. Given that there were 73 years unexpired we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of fees.