Unfortunately that a Tregaron residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Tregaron property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher amount will be payable. Most flat owners in Tregaron will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold premises in Tregaron with over 100 years outstanding 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 circumstances there is often little upside in buying the freehold 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
| 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. |
Engaging our service will provide you better control over the value of your Tregaron leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Eli, came seriously close to the 80-year threshold with the lease on his leasehold flat in Tregaron. In buying his home twenty years ago, the length of the lease was of little bearing. As luck would have it, he noticed he would imminently be paying an inflated amount for a lease extension. Eli extended the lease just ahead of time last May. Eli and the freeholder via the management company ultimately agreed on an amount of £5,000 . If the lease had slipped to less than eighty years, the amount would have escalated by at least £1,150.
In 2009 we were approached by Mr and Mrs. D Richardson who, having acquired a one bedroom flat in Tregaron in October 1999. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by an additional years. Identical residencies in Tregaron with 100 year plus lease were worth £210,600. The average amount of ground rent was £45 billed quarterly. The lease terminated in 2087. Having 62 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £18,100 and £20,800 exclusive of expenses.
In 2014 we were called by Mrs G Young who, having owned a one bedroom apartment in Tregaron in October 1997. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by a further 90 years. Comparative residencies in Tregaron with a long lease were in the region of £265,000. The mid-range ground rent payable was £50 billed annually. The lease end date was on 3 November 2098. Taking into account 73 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including costs.