Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Benllech. Inevitably, the term of lease remaining shortens as time goes by. This may slip by relatively unnoticed when the residence has to be sold or refinanced. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension. Eligible leaseholders in Benllech have the legal entitlement to extend the lease for an additional ninety years under legislation. Do give careful consideration before putting off your Benllech lease extension. Putting off that expense now simply increases the price you will ultimately have to pay for a lease extension
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with handle Benllech 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.
In recent months Alexander, started to get close to the eighty-year mark with the lease on his basement flat in Benllech. In buying his flat two decades ago, the length of the lease was of no significance. Luckily, it dawned on him that he would imminently be paying way over the odds for a lease extension. Alexander was able to extend his lease just under the wire last July. Alexander and the landlord who owned the flat above subsequently agreed on the final figure of £5,000 . If the lease had gone lower than eighty years, the amount would have increased by a minimum £1,050.
In 2014 we were approached by Mr and Mrs. G Bonnet who, having purchased a basement flat in Benllech in October 1999. The question was if we could estimate the premium would likely be to prolong the lease by an additional years. Comparative premises in Benllech with 100 year plus lease were valued around £285,000. The average amount of ground rent was £45 collected monthly. The lease concluded in 2098. Taking into account 72 years left we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including professional charges.
Last Christmas we were e-mailed by Ms Hannah Lewis , who moved into a purpose-built apartment in Benllech in February 2002. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by ninety years. Identical properties in Benllech with 100 year plus lease were valued around £233,200. The average ground rent payable was £60 invoiced per annum. The lease end date was on 22 July 2087. Taking into account 61 years left we calculated the compensation to the freeholder to extend the lease to be within £22,800 and £26,400 not including legals.