With a residential leasehold premises in Llanidloes, you are actually buying a right to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than 80 years left. Anyone in Llanidloes with a lease approaching 81 years remaining should seriously think of extending it without delay. When a lease has below 80 years remaining, under the relevant Act the freeholder is entitled to calculate and levy a larger premium, based on a technical computation, known as “marriage value” which is payable.
Leasehold residencies in Llanidloes with more than 100 years remaining 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 property. In such situations there is often little upside in purchasing 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; |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you increased control over the value of your Llanidloes leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Following lengthy discussions with the freeholder of her basement flat in Llanidloes, Chantelle started the lease extension process as the eighty year mark was fast nearing. The lease extension was finalised in March 2006. The freeholder’s costs were kept to an absolute minimum.
Mr and Mrs. V Collins owned a one bedroom flat in Llanidloes in October 2003. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by an additional years. Comparable premises in Llanidloes with an extended lease were valued around £233,200. The average ground rent payable was £60 billed every twelve months. The lease concluded in 2086. Given that there were 61 years left we estimated the premium to the freeholder for the lease extension to be between £22,800 and £26,400 exclusive of expenses.
In 2009 we were called by Mr and Mrs. N Evans who, having acquired a ground floor flat in Llanidloes in October 1999. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Similar premises in Llanidloes with 100 year plus lease were worth £171,800. The mid-range amount of ground rent was £55 invoiced quarterly. The lease came to a finish on 7 August 2075. Given that there were 50 years unexpired we approximated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 exclusive of professional charges.