It’s a harsh certainty that a Reynoldston residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Reynoldston property market.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term drops under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Reynoldston will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
Leasehold properties in Reynoldston with over 100 years unexpired 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 to be gained by buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Reynoldston,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Reynoldston valuers.
David was the the leasehold proprietor of a 2 bedroom flat in Reynoldston on the market with a lease of a few days over 72 years unexpired. David informally approached his landlord a well known London-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 rise in the rent to £100 per annum. No ground rent would be payable on a lease extension were David to exercise his statutory right. David obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and readily saleable.
Last Autumn we were e-mailed by Mrs P Walker , who was assigned a lease of a newly refurbished flat in Reynoldston in May 2011. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Similar flats in Reynoldston with a long lease were in the region of £210,000. The average ground rent payable was £50 billed quarterly. The lease expired on 20 November 2106. Considering the 80 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
Mrs Danielle Petit purchased a basement flat in Reynoldston in June 1995. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year lease extension. Identical properties in Reynoldston with a long lease were valued about £275,000. The average ground rent payable was £45 billed annually. The lease lapsed in 2095. Considering the 69 years unexpired we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of legals.