The re-sale value of a leasehold property in Llanbedrgoch depends on how long the lease has remaining. If it is close to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is ideal to start the lease extension process when the lease still has 82 years unexpired so that formalities can be finalised well before the 80 year threshold. Leasehold Reform legislation enables Llanbedrgoch qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus an additional term of 90 years. The reason of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Llanbedrgoch with in excess of one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold 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. |
| 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. |
| 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 conveyancing solicitors that we work with procure Llanbedrgoch 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 conveyancing solicitor we work with provide it.
Subsequent to protracted discussions with the landlord of her leasehold flat in Llanbedrgoch, Niamh commenced the lease extension process just as the lease was coming close to the critical eighty-year threshold. The transaction completed in May 2012. The landlord’s costs were restricted to a tad over 650 pounds.
In 2011 we were phoned by Mr and Mrs. U Watson who, having purchased a one bedroom apartment in Llanbedrgoch in October 1997. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year lease extension. Comparative premises in Llanbedrgoch with a long lease were valued around £205,000. The average amount of ground rent was £50 billed every twelve months. The lease finished on 26 March 2104. Taking into account 79 years unexpired we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.
In 2014 we were phoned by Dr H Williams who, having purchased a one bedroom apartment in Llanbedrgoch in June 1998. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Comparable residencies in Llanbedrgoch with an extended lease were worth £275,000. The average ground rent payable was £65 invoiced every twelve months. The lease concluded in 2093. Considering the 68 years left we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus professional charges.