The value of Llanfechain leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase materialy once the unexpired lease term is less than 80 years
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Using our service will provide you better control over the value of your Llanfechain leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide 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.
Nathan owned a 2 bedroom flat in Llanfechain being sold with a lease of fraction over 72 years remaining. Nathan on an informal basis approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 per annum. Ordinarily, ground rent would not be payable on a lease extension were Nathan to invoke his statutory right. Nathan obtained expert legal guidance and was able to make a more informed decision and deal with the matter and sell the property.
In 2012 we were phoned by Dr Freddie Clark who, having took over the lease of a garden apartment in Llanfechain in August 2003. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Identical homes in Llanfechain with a long lease were worth £198,400. The mid-range amount of ground rent was £65 billed monthly. The lease end date was on 23 October 2085. Taking into account 59 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 plus legals.
Last Summer we were called by Dr Edward Rogers , who completed a newly refurbished flat in Llanfechain in May 1995. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Similar residencies in Llanfechain with 100 year plus lease were in the region of £255,000. The mid-range amount of ground rent was £50 collected quarterly. The lease terminated in 2096. Taking into account 70 years remaining we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including fees.