The re-sale value of a leasehold property in Bala depends on how many years the lease has left to run. If it is close to or less than 80 years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is ideal to start the lease extension process when a lease still has 82 years remaining so that a lease extension can be finalised prior to the 80 year cut off point. Current legislation entitles Bala qualifying lessees to an additional term of ninety years over and above the existing term, at a peppercorn rent (no ground rent). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake Bala 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.
Following lengthy negotiations with the freeholder of her ground floor flat in Bala, Madeleine initiated the lease extension process as the eighty year deadline was fast approaching. The transaction was finalised in November 2011. The freeholder’s costs were kept to an absolute minimum.
Dr G Robinson took over the lease of a newly refurbished flat in Bala in February 1999. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a 90 year extension to my lease. Comparative homes in Bala with 100 year plus lease were worth £227,800. The mid-range ground rent payable was £45 invoiced every twelve months. The lease ran out on 7 September 2090. Having 65 years remaining we approximated the premium to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of costs.
Last Winter we were approach by Mr and Mrs. B Wood , who purchased a newly refurbished apartment in Bala in October 1995. 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. Comparative premises in Bala with 100 year plus lease were worth £275,000. The average ground rent payable was £55 invoiced quarterly. The lease ended in 2101. Having 76 years remaining we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including expenses.