For those whose Brecon property is held on a long lease, the message is clear – if nothing is done, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to procure a lease extension.
Leasehold residencies in Brecon with over 100 years remaining 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 upside in buying the freehold unless savings on ground rent and estate charges justify 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| 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. |
Lease extensions in Brecon can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor with experience in this area.
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 a wealth of experience 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.
Subsequent to protracted correspondence with the landlord of her one bedroom apartment in Brecon, Isabel initiated the lease extension process as the 80 year threshold was rapidly coming. The legal work completed in June 2005. The freeholder’s costs were negotiated to below 450 pounds.
Mr Gabriel Peterson took over the lease of a one bedroom flat in Brecon in July 2001. The question was if we could estimate the premium could be for a 90 year extension to my lease. Comparative premises in Brecon with a long lease were valued about £225,400. The average amount of ground rent was £45 invoiced per annum. The lease came to a finish in 2089. Taking into account 64 years left we approximated the premium to the freeholder for the lease extension to be between £16,200 and £18,600 plus fees.
In 2011 we were contacted by Ms K Alexander who, having acquired a basement apartment in Brecon in February 2000. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparative homes in Brecon with 100 year plus lease were valued around £270,000. The average ground rent payable was £55 billed quarterly. The lease ran out on 5 July 2100. Taking into account 75 years unexpired we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of fees.