Owning a apartment usually means owning a lease of the property, which has a set term of years. your lease will normally be granted for a prescribed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Bryn Y Baal. Inevitably, the term of lease left shortens over time. This may pass by relatively unnoticed when the residence needs to be sold or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension. Qualifying leaseholders in Bryn Y Baal have the legal entitlement to extend the lease for an additional ninety years in accordance with legislation. You should give careful deliberation before putting off your Bryn Y Baal lease extension. Putting off that expense now simply increases the price you will eventually incur for a lease extension
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
The conveyancing solicitors that we work with procure Bryn Y Baal 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.
During the course of the last few months Freddie, came very near to the eighty-year threshold with the lease on his purpose- built flat in Bryn Y Baal. In buying his property twenty years ago, the lease term was of minimal relevance. Luckily, it dawned on him that he needed to take action soon on Extending the lease. Freddie arranged for a lease extension at the eleventh hour last July. Freddie and the freeholder via the management company ultimately agreed on an amount of £6,000 . If the lease had dropped lower than eighty years, the figure would have gone up by a minimum £1,150.
Mr and Mrs. H Rodríguez owned a ground floor apartment in Bryn Y Baal in April 2011. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical residencies in Bryn Y Baal with a long lease were valued around £200,800. The mid-range amount of ground rent was £65 collected annually. The lease concluded on 13 July 2085. Considering the 60 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £20,900 and £24,200 exclusive of legals.
In 2011 we were e-mailed by Ms Kirsty King who, having completed a purpose-built apartment in Bryn Y Baal in March 2002. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Comparative residencies in Bryn Y Baal with a long lease were in the region of £255,000. The average amount of ground rent was £50 collected yearly. The lease ended in 2096. Taking into account 71 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.