Gilwern residential property owned on a long lease is a depreciating asset because a leaseholder only owns the property for a set term.
Leasehold residencies in Gilwern with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing 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. |
| 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. |
| 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 conveyancers that we work with procure Gilwern 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.
After protracted discussions with the freeholder of her two bedroom flat in Gilwern, Mia started the lease extension process as the 80 year deadline was fast nearing. The legal work was concluded in November 2014. The freeholder’s fees were negotiated to slightly above six hundred GBP.
Mr and Mrs. C Petit bought a one bedroom flat in Gilwern in March 2012. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Comparable premises in Gilwern with an extended lease were worth £206,200. The average amount of ground rent was £60 billed quarterly. The lease concluded on 12 July 2082. Having 56 years remaining we approximated the premium to the freeholder to extend the lease to be between £31,400 and £36,200 exclusive of expenses.
In 2009 we were e-mailed by Ms P Gray who, having completed a one bedroom flat in Gilwern in October 1996. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by 90 years. Comparable properties in Gilwern with 100 year plus lease were in the region of £300,000. The average ground rent payable was £50 collected every twelve months. The lease concluded in 2102. Having 76 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including professional charges.