There is no doubt about it a leasehold property in Betws Y Coed is a wasting asset as a result of the shortening lease. Where the residual term has, over 99 years remaining then this decrease may be negligible nevertheless there will become a stage when a lease has less than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the primary logic behind why you should extend the lease sooner as opposed to later. The majority of flat owners in Betws Y Coed will qualify for this right; however a lawyer can confirm whether you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold residencies in Betws Y Coed with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Betws Y Coed,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Betws Y Coed valuers.
Jake was the the leasehold proprietor of a high value apartment in Betws Y Coed being marketed with a lease of just over sixty years unexpired. Jake informally spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Jake to invoke his statutory right. Jake procured expert advice and was able to make a more informed decision and handle with the matter and sell the flat.
In 2011 we were contacted by Dr M Fournier who, having took over the lease of a studio flat in Betws Y Coed in February 2001. We are asked if we could estimate the premium would be to extend the lease by an additional years. Similar homes in Betws Y Coed with 100 year plus lease were worth £255,000. The average amount of ground rent was £50 billed yearly. The lease concluded on 10 October 2097. Given that there were 71 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including costs.
Last year we were contacted by Mr Jonathan Scott , who took over the lease of a first floor apartment in Betws Y Coed in September 2012. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by ninety years. Comparative properties in Betws Y Coed with 100 year plus lease were valued around £254,200. The average amount of ground rent was £60 collected quarterly. The lease ended in 2077. Considering the 51 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £43,700 and £50,600 plus expenses.