Borth residential property owned on a long lease is a wasting asset as the leaseholder only owns the property for a set term.
It is generally accepted that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Coventry Building Society | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you enhanced control over the value of your Borth leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Dexter owned a studio apartment in Borth on the market with a lease of a little over 72 years left. Dexter on an informal basis approached his landlord being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Dexter to invoke his statutory right. Dexter obtained expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
Last Winter we were called by Mr and Mrs. M Adams , who moved into a one bedroom flat in Borth in June 1997. The dilemma was if we could shed any light on how much (approximately) price would likely be to prolong the lease by ninety years. Comparative homes in Borth with a long lease were valued around £176,200. The average ground rent payable was £65 collected every twelve months. The lease ran out on 25 July 2082. Given that there were 56 years left we estimated the premium to the landlord to extend the lease to be within £29,500 and £34,000 plus fees.
Last Christmas we were called by Mr Nathan Edwards , who owned a one bedroom apartment in Borth in November 2002. We are asked if we could approximate the price would be to extend the lease by ninety years. Comparable residencies in Borth with an extended lease were worth £237,600. The average ground rent payable was £45 invoiced quarterly. The lease expired on 17 October 2093. Considering the 67 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 exclusive of professional charges.