The value of Bedwas leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase materialy once the remaining term is less than eighty years
Leasehold premises in Bedwas with more than 100 years remaining 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 circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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; |
| Chelsea 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you increased control over the value of your Bedwas leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Thomas, started to get close to the eighty-year mark with the lease on his one bedroom apartment in Bedwas. In buying his home two decades ago, the unexpired term was of minimal interest. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Thomas was able to extend his lease just ahead of time in March. Thomas and the freeholder via the management company subsequently settled on sum of £6,000 . If he had missed the deadline, the figure would have gone up by a minimum £925.
Mr P Laurent bought a basement flat in Bedwas in September 2010. We are asked if we could estimate the price would likely be for a 90 year lease extension. Comparative properties in Bedwas with 100 year plus lease were in the region of £223,400. The mid-range ground rent payable was £60 billed yearly. The lease ended on 25 November 2084. Considering the 59 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £27,600 and £31,800 plus legals.
Last month we were called by Mr and Mrs. G Murphy , who bought a basement flat in Bedwas in July 1998. We are asked if we could estimate the price could be for a 90 year lease extension. Identical residencies in Bedwas with an extended lease were valued about £205,000. The average amount of ground rent was £50 invoiced quarterly. The lease came to a finish in 2104. Taking into account 79 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus fees.