Llandough residential property held on a long lease is a depreciating asset because a leaseholder merely owns the property for a period of years.
Leasehold residencies in Llandough with over 100 years outstanding on the lease are sometimes 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 upside in buying the freehold unless savings on ground rent and maintenance charges justify 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; |
| Birmingham Midshires | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Engaging our service will provide you enhanced control over the value of your Llandough leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Callum was the the leasehold proprietor of a conversion flat in Llandough being sold with a lease of just over 61 years remaining. Callum on an informal basis contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Callum to invoke his statutory right. Callum procured expert advice and secured an acceptable resolution informally and sell the flat.
In 2010 we were approached by Mrs Danielle Morris who, having purchased a garden flat in Llandough in September 1999. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparative residencies in Llandough with a long lease were in the region of £193,400. The mid-range ground rent payable was £65 billed monthly. The lease expired in 2084. Considering the 59 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 not including expenses.
Last Spring we were approach by Mrs L Petit , who bought a purpose-built flat in Llandough in October 1996. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable residencies in Llandough with an extended lease were valued around £255,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease terminated in 2095. Having 70 years outstanding we approximated the premium to the landlord for the lease extension to be between £10,500 and £12,000 plus costs.