For anyone whose Dulas and Nebo flat is held on a long lease, the message is clear – if you ignore the situation, the property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to procure a lease extension.
Leasehold premises in Dulas and Nebo with over 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Dulas and Nebo 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.
Zachary owned a studio apartment in Dulas and Nebo on the market with a lease of fraction over fifty eight years unexpired. Zachary on an informal basis contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Zachary to invoke his statutory right. Zachary procured expert advice and secured satisfactory deal without going to tribunal and ending up with a market value flat.
In 2010 we were called by Mr H Bertrand who, having purchased a one bedroom flat in Dulas and Nebo in November 2005. The question was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar homes in Dulas and Nebo with 100 year plus lease were valued around £260,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease terminated on 17 August 2098. Having 73 years left we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus professional charges.
In 2009 we were approached by Mr and Mrs. E Cooper who, having took over the lease of a ground floor apartment in Dulas and Nebo in January 2006. The question was if we could estimate the premium would be to prolong the lease by a further 90 years. Identical residencies in Dulas and Nebo with an extended lease were worth £261,600. The mid-range ground rent payable was £60 collected yearly. The lease terminated in 2077. Taking into account 52 years left we calculated the compensation to the landlord to extend the lease to be between £39,000 and £45,000 not including costs.