Builth Wells leases on domestic properties are gradually losing value. Where your lease has approximately 90 years remaining, you should start thinking about a lease extension. Eighty years is a significant number: when the remaining term of a lease dips below this level then you start paying an additional element called marriage value. Leasehold owners in Builth Wells will mostly qualify for a lease extension; however a solicitor will confirm your eligibility. In some situations you may not be entitled. There are also strict timetables and formalities to follow once the process is triggered so it’s prudent to be guided by a conveyancer during the process.
Leasehold properties in Builth Wells with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Retaining our service gives you increased control over the value of your Builth Wells leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Harry was the the leasehold proprietor of a studio apartment in Builth Wells being sold with a lease of a few days over 61 years unexpired. Harry on an informal basis approached his freeholder a well known local-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Harry to exercise his statutory right. Harry procured expert advice and secured satisfactory deal informally and ending up with a market value flat.
Last Winter we were approach by Mr and Mrs. Y Rogers , who took over the lease of a one bedroom apartment in Builth Wells in September 2007. We are asked if we could estimate the price would likely be to prolong the lease by 90 years. Comparative homes in Builth Wells with an extended lease were worth £285,000. The mid-range ground rent payable was £45 collected every twelve months. The lease elapsed in 2096. Having 71 years outstanding we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 plus expenses.
In 2012 we were contacted by Mr A Campbell who, having owned a studio flat in Builth Wells in February 2007. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Identical premises in Builth Wells with an extended lease were worth £225,800. The mid-range ground rent payable was £60 collected quarterly. The lease termination date was on 11 March 2085. Given that there were 60 years outstanding we approximated the premium to the landlord for the lease extension to be within £25,700 and £29,600 not including fees.