The market value of a leasehold property in Rhosneigr is impacted by how many years the lease has left to run. If it is close to or fewer than 80 years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension before purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be finalised prior to the eighty year mark. Leasehold Reform legislation entitles Rhosneigr qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a further term of ninety years. The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Rhosneigr 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 year Muhammad, came precariously near to the 80-year mark with the lease on his basement flat in Rhosneigr. Having bought his property two decades ago, the length of the lease was of little importance. Luckily, it dawned on him that he needed to take steps soon on a lease extension. Muhammad extended the lease just in the nick of time last January. Muhammad and the landlord who owned the flat above ultimately settled on an amount of £6,000 . If he failed to meet the deadline, the sum would have gone up by a minimum £1,000.
Last Winter we were phoned by Ms Katie Reed , who acquired a first floor flat in Rhosneigr in April 2003. We are asked if we could estimate the premium could be for a ninety year lease extension. Similar premises in Rhosneigr with 100 year plus lease were valued about £300,000. The mid-range amount of ground rent was £50 collected monthly. The lease lapsed in 2101. Having 76 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of expenses.
Mr Dylan Michel owned a one bedroom apartment in Rhosneigr in March 2012. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by ninety years. Comparative flats in Rhosneigr with a long lease were in the region of £257,800. The average amount of ground rent was £65 invoiced monthly. The lease came to a finish on 22 September 2090. Having 65 years unexpired we calculated the premium to the landlord to extend the lease to be within £18,100 and £20,800 exclusive of expenses.