Llandovery leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Llandovery residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Llandovery you really ought to investigate if your lease has between 70 and ninety years remaining. There are good reasons why a Llandovery leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is actioned without delay
Leasehold premises in Llandovery with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Llandovery,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Llandovery valuers.
During the course of the last few months Arthur, came precariously near to the 80-year mark with the lease on his studio apartment in Llandovery. Having bought his flat two decades ago, the lease term was of no importance. As luck would have it, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Arthur was able to extend his lease just ahead of time in March. Arthur and the freeholder via the management company ultimately settled on sum of £5,000 . If the lease had gone to less than 80 years, the price would have increased by a minimum £1,075.
Mr and Mrs. S Rogers owned a one bedroom flat in Llandovery in October 1996. The question was if we could approximate the premium could be to prolong the lease by ninety years. Comparative premises in Llandovery with 100 year plus lease were worth £216,000. The mid-range ground rent payable was £60 billed monthly. The lease ran out in 2084. Having 58 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 plus professional charges.
Mr and Mrs. W Walker bought a newly refurbished flat in Llandovery in November 1999. We are asked if we could estimate the price could be for a 90 year lease extension. Comparative flats in Llandovery with an extended lease were valued around £200,000. The average ground rent payable was £50 billed quarterly. The lease concluded on 28 April 2104. Taking into account 78 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.