The market value of a leasehold property in Cilfynydd is impacted by how long the lease has left to run. If it is near to or fewer than 80 years you should foresee difficulties on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. It is ideal to start the lease extension process when the lease still has 82 years remaining so that all matters can be concluded prior to the eighty year cut off point. Statute entitles Cilfynydd qualifying lessees to acquire a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Cilfynydd 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 lawyer we work with provide it.
Samuel owned a studio apartment in Cilfynydd being marketed with a lease of a little over 59 years left. Samuel informally spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Samuel to invoke his statutory right. Samuel procured expert legal guidance and secured satisfactory resolution without resorting to tribunal and sell the flat.
In 2009 we were called by Mr and Mrs. K Watson who, having was assigned a lease of a purpose-built flat in Cilfynydd in May 1999. The question was if we could estimate the price would likely be to extend the lease by an additional years. Comparable premises in Cilfynydd with 100 year plus lease were valued about £285,000. The average amount of ground rent was £55 billed yearly. The lease finished in 2105. Given that there were 79 years outstanding we approximated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 not including legals.
Mr and Mrs. Y Rogers took over the lease of a first floor apartment in Cilfynydd in August 2003. The question was if we could estimate the premium would be to extend the lease by 90 years. Comparable properties in Cilfynydd with 100 year plus lease were in the region of £193,400. The mid-range amount of ground rent was £65 invoiced monthly. The lease termination date was in 2085. Taking into account 59 years left we approximated the premium to the landlord to extend the lease to be between £21,900 and £25,200 exclusive of fees.