For those whose Hay On Wye home is held on a long lease, the message is clear – if you do nothing, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension.
Leasehold premises in Hay On Wye with more than one hundred years outstanding on the lease are often 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 buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 will provide you enhanced control over the value of your Hay On Wye leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After unsuccessful correspondence with the freeholder of her basement flat in Hay On Wye, Kate started the lease extension process just as the lease was nearing the critical eighty-year deadline. The transaction was concluded in April 2008. The landlord’s costs were kept to an absolute minimum.
Ms Lauren Martinez completed a studio flat in Hay On Wye in June 1999. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable residencies in Hay On Wye with an extended lease were worth £200,000. The mid-range amount of ground rent was £50 collected per annum. The lease expiry date was in 2102. Considering the 77 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of expenses.
In 2010 we were approached by Mr and Mrs. O Reed who, having completed a basement flat in Hay On Wye in August 2012. We are asked if we could approximate the premium would likely be to prolong the lease by an additional years. Similar homes in Hay On Wye with an extended lease were valued around £260,200. The mid-range amount of ground rent was £65 invoiced per annum. The lease terminated in 2091. Given that there were 66 years remaining we estimated the premium to the landlord to extend the lease to be within £16,200 and £18,600 not including professional charges.