When it comes to domestic leasehold property in Llandaff North, you are in fact renting it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly when there are fewer than 80 years left. Anyone in Llandaff North with a lease drawing near to 81 years left should seriously think of extending it sooner than later. When a lease has below 80 years remaining, under the relevant Act the landlord can calculate and charge a greater premium, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold properties in Llandaff North with more than 100 years outstanding 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 home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Coventry Building Society | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Llandaff North 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.
Ibrahim was the the leasehold owner of a studio apartment in Llandaff North being sold with a lease of a little over fifty eight years unexpired. Ibrahim informally approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Ibrahim to exercise his statutory right. Ibrahim obtained expert advice and was able to make a more informed decision and deal with the matter and sell the property.
In 2012 we were approached by Ms A Young who, having bought a one bedroom flat in Llandaff North in October 2000. The dilemma was if we could estimate the price could be for a 90 year lease extension. Similar premises in Llandaff North with 100 year plus lease were valued around £250,000. The average ground rent payable was £50 collected every twelve months. The lease expired on 4 August 2095. Having 70 years left we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.
Last year we were contacted by Dr U Vincent , who completed a recently refurbished apartment in Llandaff North in June 2011. The dilemma was if we could shed any light on how much (roughly) premium could be to prolong the lease by ninety years. Similar residencies in Llandaff North with a long lease were worth £246,800. The average ground rent payable was £60 billed yearly. The lease concluded in 2075. Having 50 years as a residual term we approximated the premium to the landlord for the lease extension to be between £44,700 and £51,600 exclusive of expenses.