On the balance of probabilities if you own a flat in Porth you actually own a long leasehold interest over your property
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Porth 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 lawyer we work with provide it.
Owen was the the leasehold proprietor of a studio flat in Porth on the market with a lease of fraction over sixty years outstanding. Owen on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £50 annually. No ground rent would be due on a lease extension were Owen to invoke his statutory right. Owen procured expert legal guidance and was able to make an informed decision and deal with the matter and sell the property.
In 2009 we were approached by Mr and Mrs. D Mercier who, having completed a basement apartment in Porth in February 1997. The question was if we could approximate the premium could be for a ninety year lease extension. Comparative premises in Porth with an extended lease were in the region of £280,000. The mid-range amount of ground rent was £45 billed monthly. The lease ended on 22 June 2096. Given that there were 70 years remaining we approximated the premium to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of professional charges.
In 2011 we were contacted by Dr Lewis Green who, having owned a purpose-built flat in Porth in July 2011. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Comparable flats in Porth with an extended lease were worth £223,400. The mid-range amount of ground rent was £60 collected per annum. The lease expired in 2085. Taking into account 59 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £27,600 and £31,800 exclusive of expenses.