The re-sale value of a leasehold property in Benllech depends on how many years the lease has left to run. If it is near to or less than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is ideal to start the lease extension process when the lease still has 82 years unexpired so that a lease extension can be concluded well before the 80 year mark. Leasehold Reform legislation entitles Benllech qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure 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.
Ali owned a high value apartment in Benllech being marketed with a lease of fraction over sixty years left. Ali on an informal basis contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 annually. Ordinarily, ground rent would not be due on a lease extension were Ali to invoke his statutory right. Ali procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last year we were called by Mr and Mrs. G Adams , who owned a studio apartment in Benllech in September 2006. We are asked if we could approximate the price would be to prolong the lease by 90 years. Comparable premises in Benllech with an extended lease were valued around £285,000. The mid-range ground rent payable was £45 billed every twelve months. The lease expired in 2096. Considering the 71 years left we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of fees.
In 2012 we were e-mailed by Mr and Mrs. E Peterson who, having owned a purpose-built apartment in Benllech in August 1996. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable flats in Benllech with 100 year plus lease were worth £225,800. The mid-range amount of ground rent was £60 invoiced quarterly. The lease came to a finish on 15 May 2085. Given that there were 60 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £23,800 and £27,400 exclusive of costs.