The nearer a residential lease in Pontcanna nears to zero years unexpired, the the greater the reduction in the value of the property. Where the residual term has, more than 100 years to run then this decrease may be negligible nevertheless there will become a point in time when a lease has less than eighty years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should extend the lease without delay. Many flat owners in Pontcanna will qualify for this right; that being said a lawyer will be able to advise if you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold properties in Pontcanna with more than 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying 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; |
| Birmingham Midshires | Minimum 70 years from the date 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Pontcanna,the lease extension solicitors 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 Pontcanna valuers.
In recent months Eli, started to get near to the eighty-year mark with the lease on his garden apartment in Pontcanna. In buying his flat two decades ago, the unexpired term was of minimal significance. As luck would have it, he became aware that he would imminently be paying an inflated amount for Extending the lease. Eli was able to extend his lease just under the wire in September. Eli and the landlord ultimately settled on a premium of £6,000 . If he had missed the deadline, the price would have escalated by at least £1,125.
Mr and Mrs. J Wood was assigned a lease of a ground floor apartment in Pontcanna in August 2008. We are asked if we could approximate the price would likely be to prolong the lease by 90 years. Comparative flats in Pontcanna with an extended lease were valued around £193,400. The average amount of ground rent was £65 billed quarterly. The lease terminated on 10 April 2084. Considering the 59 years remaining we estimated the compensation to the landlord to extend the lease to be between £21,900 and £25,200 exclusive of professional charges.
In 2009 we were e-mailed by Mr and Mrs. I Wright who, having owned a first floor apartment in Pontcanna in November 2003. The question was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Comparable flats in Pontcanna with a long lease were in the region of £255,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease finished in 2095. Considering the 70 years as a residual term we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of fees.