When it comes to residential leasehold property in Bala, you are actually purchasing an entitlement to live in a property for a set period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may think about extending the lease sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater especially once there are fewer than eighty years left. Residents in Bala with a lease approaching 81 years left should seriously consider extending it as soon as possible. Once a lease has under eighty years outstanding, under the relevant Act the freeholder is entitled to calculate and charge a greater premium, based on a technical computation, known as “marriage value” which is payable.
It is generally considered that a residential leasehold with over one hundred 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 worth the same as 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | 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. |
Retaining our service gives you increased control over the value of your Bala leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago Dylan, started to get near to the eighty-year mark with the lease on his leasehold apartment in Bala. In buying his flat twenty years previously, the lease term was of no interest. by good luck, he realised he would imminently be paying an inflated amount for a lease extension. Dylan arranged for a lease extension at the eleventh hour last January. Dylan and the landlord subsequently settled on the final figure of £6,000 . If the lease had dropped to less than eighty years, the price would have increased by a minimum £925.
Last Summer we were e-mailed by Mr and Mrs. G André , who acquired a purpose-built flat in Bala in July 2006. The question was if we could estimate the price would likely be for a 90 year extension to my lease. Identical homes in Bala with an extended lease were in the region of £255,000. The average amount of ground rent was £50 invoiced monthly. The lease end date was in 2095. Taking into account 70 years remaining we approximated the compensation to the landlord to extend the lease to be between £10,500 and £12,000 plus legals.
Last Autumn we were e-mailed by Mrs Jessica Bell , who was assigned a lease of a studio apartment in Bala in November 2007. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Similar premises in Bala with an extended lease were worth £246,800. The average amount of ground rent was £60 invoiced every twelve months. The lease concluded on 14 November 2075. Considering the 50 years outstanding we calculated the premium to the freeholder to extend the lease to be within £44,700 and £51,600 plus legals.