Owning a flat usually means owning a lease of the property, which has a set term of years. This lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Porthcawl. Clearly, the length of lease left shortens over time. This is often overlooked and only raises itself as an issue when the flat or house needs to be sold or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Eligible leaseholders in Porthcawl have the legal entitlement to extend the lease for a further ninety years under the 1993 Leasehold Reform Act. You should give due consideration before putting off your Porthcawl lease extension. Holding off that expense now simply increases the price you will ultimately incur for a lease extension
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for many years in the future.
| 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; |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Porthcawl can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Porthcawl lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Following protracted correspondence with the landlord of her first floor flat in Porthcawl, Lydia commenced the lease extension process as the eighty year threshold was swiftly advancing. The transaction completed in January 2013. The landlord’s costs were restricted to about 600 GBP.
Last month we were phoned by Mr and Mrs. S Jones , who acquired a first floor apartment in Porthcawl in May 2012. We are asked if we could approximate the premium would be for a 90 year extension to my lease. Comparative premises in Porthcawl with a long lease were worth £280,000. The average ground rent payable was £45 collected per annum. The lease lapsed in 2094. Taking into account 69 years left we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.
In 2011 we were approached by Dr Lucas Peterson who, having was assigned a lease of a first floor apartment in Porthcawl in April 2004. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by 90 years. Comparable flats in Porthcawl with 100 year plus lease were worth £218,400. The average amount of ground rent was £60 collected quarterly. The lease elapsed in 2084. Given that there were 59 years unexpired we approximated the premium to the freeholder for the lease extension to be within £27,600 and £31,800 exclusive of expenses.