For anyone whose Llanishen property is held on a long lease, the message is clear – if no remedial action is taken, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to extend the lease.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Llanishen 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 conveyancing solicitor we work with provide it.
Last October Eli, started to get near to the eighty-year threshold with the lease on his basement apartment in Llanishen. Having bought his flat two decades ago, the lease term was of little concern. by good luck, he became aware that he needed to take steps soon on Extending the lease. Eli arranged for a lease extension just ahead of time last January. Eli and the landlord who owned the flat above eventually settled on the final figure of £6,000 . If the lease had slid to less than eighty years, the price would have increased by at least £1,100.
Mr and Mrs. V Watson owned a one bedroom flat in Llanishen in May 1998. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Similar premises in Llanishen with a long lease were in the region of £270,000. The mid-range amount of ground rent was £55 invoiced annually. The lease came to a finish in 2100. Considering the 75 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.
In 2012 we were called by Mr and Mrs. E Bernard who, having moved into a garden flat in Llanishen in February 2010. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Identical flats in Llanishen with a long lease were valued around £168,800. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease ended on 4 June 2080. Considering the 55 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £30,400 and £35,200 exclusive of professional charges.