The market value of a leasehold property in Llanbedrog depends on how many years the lease has remaining. If it is near to or fewer than 80 years you should anticipate difficulties on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. Ideally one should start the lease extension process when a lease still has 82 years unexpired so that all matters can be finalised prior to the 80 year cut off point. Statute entitles Llanbedrog qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of 90 years. The reason of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| Yorkshire 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. |
Engaging our service gives you enhanced control over the value of your Llanbedrog leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Aiden, started to get near to the 80-year mark with the lease on his purpose- built flat in Llanbedrog. Having bought his flat two decades ago, the unexpired term was of minimal relevance. Luckily, he noticed he would imminently be paying an escalated premium for a lease extension. Aiden extended the lease just ahead of time in August. Aiden and the freeholder subsequently agreed on a premium of £6,000 . If the lease had fallen to less than eighty years, the figure would have gone up by a minimum £1,050.
In 2011 we were called by Dr Amelia Thomas who, having purchased a recently refurbished apartment in Llanbedrog in January 1997. The question was if we could approximate the price could be to extend the lease by an additional years. Comparable residencies in Llanbedrog with an extended lease were worth £250,400. The average ground rent payable was £65 billed every twelve months. The lease finished on 6 February 2089. Given that there were 64 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 exclusive of professional charges.
In 2013 we were e-mailed by Ms B Petit who, having purchased a ground floor flat in Llanbedrog in June 2002. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by 90 years. Similar premises in Llanbedrog with an extended lease were valued about £189,000. The average ground rent payable was £55 billed annually. The lease finished on 13 April 2078. Having 53 years outstanding we calculated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of expenses.