With a long leasehold premises in Barmouth, you are actually buying an entitlement to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are fewer than eighty years remaining. Residents in Barmouth with a lease approaching 81 years unexpired should seriously think of extending it as soon as possible. When a lease has less than 80 years remaining, under the relevant legislation the freeholder can calculate and charge a larger premium, based on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold residencies in Barmouth with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Engaging our service will provide you better control over the value of your Barmouth leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of unsuccessful negotiations with the freeholder of her garden apartment in Barmouth, Francesca commenced the lease extension process as the eighty year mark was rapidly approaching. The lease extension was concluded in January 2015. The landlord’s charges were restricted to slightly above 500 pounds.
Last Autumn we were called by Mr M Ali , who acquired a garden flat in Barmouth in February 1999. We are asked if we could shed any light on how much (approximately) premium would be for a 90 year extension to my lease. Similar flats in Barmouth with 100 year plus lease were in the region of £218,000. The average ground rent payable was £45 invoiced monthly. The lease ended in 2088. Considering the 63 years left we approximated the premium to the freeholder to extend the lease to be within £17,100 and £19,800 plus professional charges.
Dr Abigail Adams bought a one bedroom apartment in Barmouth in May 1997. We are asked if we could approximate the premium would be to prolong the lease by an additional years. Comparable residencies in Barmouth with an extended lease were in the region of £265,000. The average ground rent payable was £55 billed every twelve months. The lease lapsed on 5 August 2099. Given that there were 74 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.