Unfortunately that a Bryncoch residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Bryncoch property market.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining drops under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Bryncoch will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold properties in Bryncoch with more than one hundred years unexpired on the lease are often 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 upside in buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The conveyancing solicitors that we work with undertake Bryncoch 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.
In the wake of 6 months of protracted discussions with the freeholder of her basement apartment in Bryncoch, Sian started the lease extension process just as the lease was coming close to the crucial 80-year threshold. The legal work completed in January 2015. The landlord’s costs were restricted to about 600 GBP.
In 2013 we were e-mailed by Dr Jackson Bernard who, having completed a one bedroom apartment in Bryncoch in January 2009. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparative premises in Bryncoch with an extended lease were in the region of £255,000. The average amount of ground rent was £50 collected monthly. The lease ran out in 2097. Taking into account 71 years outstanding we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.
In 2012 we were contacted by Mrs B Ricardo who, having took over the lease of a garden flat in Bryncoch in October 1996. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by a further 90 years. Comparative premises in Bryncoch with a long lease were worth £254,200. The mid-range ground rent payable was £60 collected yearly. The lease finished on 4 June 2077. Having 51 years left we approximated the compensation to the landlord to extend the lease to be within £43,700 and £50,600 exclusive of expenses.