Reynoldston leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Reynoldston tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Reynoldston you really ought to see if your lease has between 70 and ninety years remaining. There are compelling reasons why a Reynoldston flat owner with a lease having around 80 years remaining should take action to ensure that a lease extension is actioned without delay
Leasehold premises in Reynoldston with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance 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. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with procure Reynoldston 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 lawyer we work with provide it.
Twenty four months ago Luca, started to get near to the eighty-year threshold with the lease on his two bedroom flat in Reynoldston. Having bought his home two decades ago, the unexpired term was of minimal relevance. by good luck, he became aware that he would soon be paying an inflated amount for Extending the lease. Luca arranged for a lease extension at the eleventh hour in May. Luca and the freeholder via the management company eventually settled on sum of £6,000 . If the lease had gone lower than eighty years, the price would have escalated by at least £925.
Dr Oliver Rivera owned a basement apartment in Reynoldston in March 1995. The dilemma was if we could approximate the premium could be for a 90 year extension to my lease. Comparable residencies in Reynoldston with 100 year plus lease were valued around £206,200. The mid-range amount of ground rent was £55 billed yearly. The lease expired in 2081. Taking into account 56 years unexpired we calculated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 not including legals.
Ms Emily Green bought a garden flat in Reynoldston in January 1999. We are asked if we could shed any light on how much (roughly) premium could be for a ninety year lease extension. Similar properties in Reynoldston with an extended lease were valued around £300,000. The mid-range ground rent payable was £50 collected annually. The lease lapsed on 3 November 2101. Considering the 76 years remaining we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of legals.