For those whose Trefnant home is held on a long lease, our message is clear – if you ignore the situation, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension.
Leasehold residencies in Trefnant with over 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 home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Godiva Mortgages | 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. |
| 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 conveyancing solicitors that we work with undertake Trefnant 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.
During the course of the last few months Benjamin, came precariously close to the 80-year mark with the lease on his two bedroom flat in Trefnant. Having purchased his flat 18 years ago, the unexpired term was of little interest. Fortunately, he realised he would imminently be paying way over the odds for Extending the lease. Benjamin arranged for a lease extension just under the wire in May. Benjamin and the freeholder ultimately settled on an amount of £5,000 . If the lease had slid lower than 80 years, the premium would have become more exhorbitant by at least £1,050.
Dr Tia Edwards completed a studio flat in Trefnant in May 1998. We are asked if we could approximate the premium could be for a ninety year lease extension. Identical properties in Trefnant with an extended lease were valued about £218,000. The average amount of ground rent was £45 billed monthly. The lease end date was on 1 June 2088. Having 63 years left we estimated the compensation to the freeholder for the lease extension to be within £17,100 and £19,800 plus costs.
In 2013 we were phoned by Mr and Mrs. U Smith who, having was assigned a lease of a newly refurbished flat in Trefnant in October 1999. The question was if we could approximate the price would likely be to extend the lease by ninety years. Similar homes in Trefnant with a long lease were valued about £265,000. The average amount of ground rent was £50 collected every twelve months. The lease ran out in 2099. Given that there were 74 years remaining we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.