Bethesda leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Bethesda residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Bethesda you must see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold premises in Bethesda with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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 are not acceptable. 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; |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Bethesda,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Bethesda valuers.
William owned a conversion flat in Bethesda being sold with a lease of just over 59 years unexpired. William informally contacted his landlord being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were William to invoke his statutory right. William procured expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2009 we were e-mailed by Mr E White who, having moved into a studio flat in Bethesda in February 2004. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by a further 90 years. Comparable properties in Bethesda with an extended lease were valued around £256,600. The mid-range amount of ground rent was £60 billed per annum. The lease finished in 2078. Given that there were 52 years outstanding we approximated the premium to the landlord for the lease extension to be between £41,800 and £48,400 plus legals.
In 2013 we were phoned by Dr Benjamin Jones who, having moved into a ground floor apartment in Bethesda in May 2006. We are asked if we could shed any light on how much (approximately) price could be to prolong the lease by ninety years. Comparable properties in Bethesda with a long lease were in the region of £218,000. The mid-range amount of ground rent was £45 invoiced annually. The lease ran out on 2 June 2089. Given that there were 63 years outstanding we approximated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 not including professional charges.