The market value of a leasehold property in Barmouth is impacted by how many years the lease has remaining. If it is close to or fewer than eighty years you should foresee difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is ideal to start the lease extension process when the lease still has 82 years remaining so that formalities can be finalised well before the eighty year threshold. Leasehold Reform legislation entitles Barmouth qualifying lessees to acquire a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with procure Barmouth 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 conveyancer we work with provide it.
Sam owned a conversion apartment in Barmouth being sold with a lease of a little over 61 years outstanding. Sam informally spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 annually. No ground rent would be payable on a lease extension were Sam to exercise his statutory right. Sam obtained expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
In 2013 we were called by Mr and Mrs. N Girard who, having completed a one bedroom apartment in Barmouth in September 2012. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Comparative homes in Barmouth with 100 year plus lease were in the region of £265,000. The average amount of ground rent was £55 billed per annum. The lease elapsed in 2100. Having 74 years unexpired we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of costs.
In 2013 we were phoned by Mr and Mrs. D Gómez who, having acquired a studio apartment in Barmouth in March 2006. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by a further 90 years. Identical flats in Barmouth with an extended lease were worth £166,400. The average amount of ground rent was £60 billed monthly. The lease elapsed in 2080. Having 54 years left we calculated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 not including costs.