Brecon leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Brecon tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Brecon you must investigate if your lease has between 70 and ninety years remaining. There are compelling reasons why a Brecon leaseholder with a lease having around eighty years unexpired should take action to make sure that a lease extension is actioned without delay
Leasehold properties in Brecon with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Lease extensions in Brecon can be a difficult process. We recommend you secure professional help from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Brecon lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Edward owned a 2 bedroom apartment in Brecon being marketed with a lease of fraction over 61 years remaining. Edward informally approached his landlord being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Edward to invoke his statutory right. Edward obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Last month we were phoned by Dr Y Kelly , who took over the lease of a studio flat in Brecon in April 2007. We are asked if we could estimate the premium would be for a 90 year lease extension. Identical residencies in Brecon with a long lease were in the region of £275,000. The mid-range ground rent payable was £55 invoiced yearly. The lease lapsed in 2101. Considering the 76 years unexpired we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of costs.
Last Winter we were approach by Mr A Brooks , who completed a recently refurbished apartment in Brecon in March 1998. We are asked if we could approximate the price would be to prolong the lease by 90 years. Comparable flats in Brecon with an extended lease were valued about £176,200. The average amount of ground rent was £65 invoiced annually. The lease ran out in 2081. Taking into account 56 years outstanding we approximated the compensation to the landlord to extend the lease to be within £29,500 and £34,000 plus legals.