The market value of a leasehold property in Barry Island depends on how long the lease has remaining. If it is close to or fewer than 80 years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is preferable to commence the lease extension process when a lease still has 82 years remaining so that formalities can be concluded well before the 80 year cut off point. Leasehold Reform legislation entitles Barry Island qualifying lessees to acquire a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Barry Island,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Barry Island valuers.
Freddie owned a conversion apartment in Barry Island being marketed with a lease of fraction over sixty years outstanding. Freddie on an informal basis contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Freddie to exercise his statutory right. Freddie obtained expert advice and secured an acceptable resolution informally and readily saleable.
Dr E Morel was assigned a lease of a basement flat in Barry Island in June 2010. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparable homes in Barry Island with a long lease were valued about £275,000. The average amount of ground rent was £55 collected per annum. The lease terminated on 23 May 2102. Given that there were 77 years remaining we calculated the premium to the landlord to extend the lease to be between £13,300 and £15,400 plus expenses.
Last year we were contacted by Mr and Mrs. P Bonnet , who took over the lease of a garden apartment in Barry Island in May 2008. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by ninety years. Comparative flats in Barry Island with an extended lease were worth £183,600. The average ground rent payable was £65 invoiced quarterly. The lease ended in 2082. Considering the 57 years unexpired we approximated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 not including professional charges.