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 , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Gwernaffield. Inevitably, the period of lease remaining reduces over time. This may pass by relatively unnoticed when the residence has to be disposed of or re-mortgaged. The fewer the years remaining the lower the value of the property and the more expensive it will be to procure a lease extension. Eligible leaseholders in Gwernaffield have the legal entitlement to extend the lease for a further ninety years in accordance with legislation. Do give careful consideration before delaying your Gwernaffield lease extension. Putting off the cost now likely increases the price you will ultimately have to pay for a lease extension
Leasehold properties in Gwernaffield with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a landlord in Gwernaffield,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Gwernaffield valuers.
16 months ago James, started to get near to the 80-year threshold with the lease on his one bedroom apartment in Gwernaffield. In buying his flat two decades ago, the length of the lease was of minimal concern. As luck would have it, he recognised he needed to take steps soon on a lease extension. James was able to extend his lease at the eleventh hour last July. James and the freeholder via the managing agents in the end agreed on a premium of £5,000 . If he not met the deadline, the figure would have become more exhorbitant by a minimum £1,025.
In 2010 we were approached by Ms M Stewart who, having purchased a first floor flat in Gwernaffield in April 2009. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical residencies in Gwernaffield with an extended lease were worth £216,000. The average amount of ground rent was £60 invoiced monthly. The lease elapsed on 16 May 2083. Considering the 58 years remaining we estimated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 plus professional charges.
In 2012 we were approached by Ms U Taylor who, having purchased a one bedroom flat in Gwernaffield in November 1996. The dilemma was if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Identical flats in Gwernaffield with 100 year plus lease were worth £200,000. The average ground rent payable was £50 invoiced every twelve months. The lease terminated in 2103. Having 78 years as a residual term we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of expenses.