With a domestic leasehold premises in Betws Y Coed, you are in fact renting it for a certain amount of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly when there are less than eighty years remaining. Leasehold owners in Betws Y Coed with a lease drawing near to 81 years left should seriously consider extending it as soon as possible. When the lease term has below 80 years left, under the current legislation the landlord can calculate and charge a greater premium, assessed on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold premises in Betws Y Coed with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with handle Betws Y Coed 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 conveyancing solicitor we work with provide it.
Last year Michael, started to get close to the 80-year threshold with the lease on his one bedroom flat in Betws Y Coed. Having bought his flat twenty years ago, the lease term was of little importance. by good luck, he became aware that he needed to take action soon on Extending the lease. Michael extended the lease just under the wire last March. Michael and the landlord who owned the flat above ultimately agreed on sum of £6,000 . If the lease had gone to less than 80 years, the sum would have escalated by at least £925.
In 2011 we were called by Mr and Mrs. L Díaz who, having was assigned a lease of a newly refurbished flat in Betws Y Coed in January 1997. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar homes in Betws Y Coed with an extended lease were worth £166,400. The mid-range ground rent payable was £60 invoiced annually. The lease expired on 3 February 2079. Taking into account 54 years remaining we calculated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 not including professional charges.
Last Christmas we were approach by Mr Owen Mercier , who bought a one bedroom apartment in Betws Y Coed in September 2005. The dilemma was if we could estimate the price could be to prolong the lease by an additional years. Similar properties in Betws Y Coed with a long lease were valued around £227,800. The average ground rent payable was £45 invoiced annually. The lease came to a finish in 2090. Considering the 65 years unexpired we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 not including costs.