Mynydd Isa leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Mynydd Isa residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Mynydd Isa you would be well advised to investigate if your lease has between 70 and ninety years remaining. There are compelling reasons why a Mynydd Isa flat owner with a lease having around 80 years left should take action to ensure that a lease extension is put in place without delay
Leasehold residencies in Mynydd Isa with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth 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 service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Mynydd Isa,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Mynydd Isa valuers.
Half a year ago Andrew, started to get near to the eighty-year mark with the lease on his basement apartment in Mynydd Isa. Having bought his flat 18 years previously, the unexpired term was of little importance. Luckily, he realised he needed to take steps soon on a lease extension. Andrew extended the lease just in the nick of time in September. Andrew and the landlord who owned the flat above ultimately agreed on a premium of £5,000 . If the lease had gone to less than eighty years, the premium would have escalated by a minimum £1,100.
In 2013 we were phoned by Mrs J King who, having acquired a purpose-built flat in Mynydd Isa in October 2007. We are asked if we could approximate the premium would be to prolong the lease by 90 years. Comparable flats in Mynydd Isa with an extended lease were valued around £242,600. The mid-range ground rent payable was £45 collected every twelve months. The lease finished in 2092. Given that there were 67 years unexpired we calculated the premium to the landlord to extend the lease to be within £11,400 and £13,200 not including costs.
Last Winter we were phoned by Mr Zachary Petit , who purchased a ground floor flat in Mynydd Isa in November 1998. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Similar properties in Mynydd Isa with an extended lease were valued around £280,000. The average amount of ground rent was £55 collected per annum. The lease finished in 2103. Given that there were 78 years left we estimated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of professional charges.