It’s a harsh certainty that a Pontcanna residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Pontcanna property prices.Where your lease has approximately ninety years left, 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 due. The majority of flat owners in Pontcanna will be able to extend under the legislation; however a conveyancing solicitor will 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 is instigated and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold residencies in Pontcanna with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Retaining our service gives you better control over the value of your Pontcanna leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Eliot was the the leasehold proprietor of a conversion apartment in Pontcanna being sold with a lease of a few days over 59 years left. Eliot on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Eliot to exercise his statutory right. Eliot obtained expert advice and secured an acceptable resolution without resorting to tribunal and readily saleable.
Last Autumn we were e-mailed by Ms E Roberts , who moved into a garden flat in Pontcanna in January 1998. We are asked if we could approximate the premium could be for a ninety year lease extension. Comparative properties in Pontcanna with an extended lease were in the region of £208,200. The mid-range ground rent payable was £65 invoiced per annum. The lease ran out in 2087. Taking into account 61 years remaining we calculated the compensation to the freeholder to extend the lease to be within £20,000 and £23,000 exclusive of costs.
In 2013 we were e-mailed by Ms U Edwards who, having owned a one bedroom apartment in Pontcanna in October 1995. We are asked if we could approximate the premium could be for a 90 year lease extension. Similar residencies in Pontcanna with 100 year plus lease were valued around £260,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease ended in 2098. Considering the 72 years as a residual term we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of costs.