When it comes to residential leasehold property in Pwllheli, you effectively rent it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive notably once there are less than eighty years remaining. Anyone in Pwllheli with a lease nearing 81 years unexpired should seriously consider extending it sooner as opposed to later. Once a lease has below 80 years remaining, under the relevant statute the freeholder can calculate and demand a larger premium, assessed on a technical calculation, known as “marriage value” which is due.
Leasehold residencies in Pwllheli with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate 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 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; |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Pwllheli 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.
Last October Sebastian, started to get close to the eighty-year mark with the lease on his purpose- built flat in Pwllheli. Having purchased his property two decades ago, the length of the lease was of little bearing. Thankfully, it dawned on him that he needed to take action soon on a lease extension. Sebastian arranged for a lease extension just under the wire in April. Sebastian and the landlord who owned the flat above in the end agreed on sum of £6,000 . If he not met the deadline, the premium would have increased by at least £1,000.
In 2012 we were e-mailed by Dr Michael Cook who, having moved into a basement apartment in Pwllheli in October 1996. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparable residencies in Pwllheli with an extended lease were worth £227,800. The mid-range ground rent payable was £45 invoiced per annum. The lease elapsed in 2090. Taking into account 65 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus fees.
In 2013 we were called by Mrs Lily Miller who, having moved into a one bedroom apartment in Pwllheli in August 2008. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable flats in Pwllheli with a long lease were worth £270,000. The mid-range amount of ground rent was £55 billed quarterly. The lease elapsed on 13 April 2101. Considering the 76 years unexpired we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.