Unfortunately that a Tregaron residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. 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 90 years left, you should 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 falls under eighty years - otherwise a higher premium will be due. Most leasehold owners in Tregaron will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the process.
It is generally accepted that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Tregaron,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Tregaron valuers.
18 months ago Sam, came perilously near to the 80-year threshold with the lease on his first floor apartment in Tregaron. Having purchased his home 19 years previously, the unexpired term was of little significance. Thankfully, it dawned on him that he would imminently be paying way over the odds for a lease extension. Sam arranged for a lease extension at the eleventh hour last March. Sam and the freeholder via the management company subsequently settled on the final figure of £6,000 . If the lease had slid below eighty years, the premium would have escalated by at least £925.
Last month we were phoned by Mr and Mrs. H Lefebvre , who was assigned a lease of a purpose-built flat in Tregaron in July 2011. We are asked if we could estimate the price could be for a 90 year lease extension. Comparable properties in Tregaron with 100 year plus lease were in the region of £242,600. The average ground rent payable was £45 billed annually. The lease expiry date was on 14 May 2091. Taking into account 67 years unexpired we approximated the premium to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of costs.
In 2014 we were called by Dr Harvey Murphy who, having was assigned a lease of a studio flat in Tregaron in October 2012. The question was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Similar residencies in Tregaron with an extended lease were worth £280,000. The mid-range ground rent payable was £55 billed quarterly. The lease ended in 2102. Considering the 78 years remaining we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of expenses.