Bagillt leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Bagillt tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Bagillt you would be well advised to see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Bagillt with in excess of one hundred years remaining on the lease are sometimes 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 upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers that we work with procure Bagillt 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 conveyancing solicitor we work with provide it.
Daniel was the the leasehold proprietor of a high value apartment in Bagillt being marketed with a lease of a little over fifty eight years unexpired. Daniel informally contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Daniel to invoke his statutory right. Daniel procured expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Last Spring we were called by Dr U Brooks , who purchased a basement flat in Bagillt in July 1995. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by a further 90 years. Identical homes in Bagillt with a long lease were valued around £255,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease lapsed on 4 January 2096. Given that there were 71 years as a residual term we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.
In 2009 we were phoned by Mrs Abbie Wilson who, having acquired a newly refurbished flat in Bagillt in February 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by a further 90 years. Comparative homes in Bagillt with 100 year plus lease were worth £254,200. The average ground rent payable was £60 collected annually. The lease termination date was in 2076. Taking into account 51 years left we estimated the premium to the landlord for the lease extension to be between £43,700 and £50,600 not including legals.