The market value of a leasehold property in Brymbo depends on how many years the lease has remaining. If it is close to or fewer than eighty years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is preferable to start the lease extension process when the lease still has 82 years to run so that a lease extension can be concluded in advance of the eighty year mark. Current legislation enables Brymbo qualifying lessees to obtain a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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 Brymbo,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 Brymbo valuers.
In 2014 Kyle, started to get near to the eighty-year mark with the lease on his first floor flat in Brymbo. In buying his property twenty years ago, the unexpired term was of little significance. Thankfully, it dawned on him that he would soon be paying way over the odds for a lease extension. Kyle extended the lease at the eleventh hour last March. Kyle and the freeholder ultimately agreed on a premium of £5,000 . If he not met the deadline, the price would have escalated by at least £1,050.
Mrs Niamh Thomas completed a studio flat in Brymbo in April 1995. We are asked if we could shed any light on how much (approximately) price could be to prolong the lease by 90 years. Similar residencies in Brymbo with 100 year plus lease were valued about £191,400. The average amount of ground rent was £55 collected monthly. The lease lapsed in 2079. Considering the 54 years left we calculated the premium to the landlord for the lease extension to be within £34,200 and £39,600 exclusive of expenses.
Last Summer we were called by Mr Jonathan Gunderson , who took over the lease of a basement flat in Brymbo in October 1995. The question was if we could shed any light on how much (roughly) price would be to prolong the lease by 90 years. Similar premises in Brymbo with a long lease were in the region of £295,000. The mid-range amount of ground rent was £45 invoiced monthly. The lease came to a finish on 18 October 2099. Having 74 years unexpired we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of costs.