The market value of a leasehold property in Hirwaun depends on how many years the lease has left to run. If it is near to or less than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when a lease still has 82 years unexpired so that all matters can be concluded in advance of the 80 year cut off point. Statute enables Hirwaun qualifying lessees to an additional term of 90 years in addition to the remaining term, at a nominal rent (no ground rent). The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Hirwaun with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth 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 justify 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; |
| 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. |
| 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. |
The conveyancing solicitors that we work with undertake Hirwaun 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 conveyancer we work with provide it.
In the wake of 9 months of unsuccessful correspondence with the landlord of her first floor apartment in Hirwaun, Catherine started the lease extension process just as the lease was nearing the all-important 80-year mark. The transaction completed in May 2006. The freeholder’s costs were restricted to less than 550 GBP.
Last Autumn we were approach by Dr C Thompson , who was assigned a lease of a ground floor flat in Hirwaun in September 2012. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Comparable premises in Hirwaun with a long lease were valued about £246,800. The mid-range ground rent payable was £60 billed per annum. The lease lapsed in 2075. Having 50 years remaining we approximated the compensation to the freeholder to extend the lease to be within £44,700 and £51,600 not including costs.
Mr and Mrs. E Michel acquired a studio apartment in Hirwaun in June 2008. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by ninety years. Comparable flats in Hirwaun with an extended lease were in the region of £203,200. The average amount of ground rent was £65 invoiced monthly. The lease expired in 2086. Considering the 61 years left we approximated the premium to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of legals.