Unfortunately that a Bassaleg residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Bassaleg property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If lease term falls under 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Bassaleg will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you increased control over the value of your Bassaleg leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Zachary owned a studio apartment in Bassaleg on the market with a lease of fraction over fifty eight years outstanding. Zachary informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Zachary to exercise his statutory right. Zachary procured expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last Autumn we were phoned by Mr A Wood , who was assigned a lease of a one bedroom flat in Bassaleg in April 2000. The dilemma was if we could estimate the premium could be for a 90 year extension to my lease. Comparative flats in Bassaleg with 100 year plus lease were valued about £216,000. The average amount of ground rent was £60 invoiced every twelve months. The lease lapsed in 2083. Considering the 58 years unexpired we estimated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of costs.
Dr Finn Robinson owned a garden apartment in Bassaleg in February 1995. The question was if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Comparative flats in Bassaleg with a long lease were worth £205,000. The average amount of ground rent was £50 invoiced quarterly. The lease lapsed on 3 June 2103. Given that there were 78 years outstanding we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of expenses.