It’s an underpublicised certainty that a Tal y bont residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Tal y bont property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under 80 years - otherwise a higher premium will be payable. Most leasehold owners in Tal y bont will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the process.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Lease extensions in Tal y bont can be a difficult process. We recommend you secure guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Tal y bont lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last year Joseph, started to get close to the eighty-year threshold with the lease on his studio apartment in Tal y bont. In buying his flat 19 years previously, the length of the lease was of little importance. Fortunately, he recognised he would imminently be paying an escalated premium for Extending the lease. Joseph arranged for a lease extension just ahead of time last June. Joseph and the freeholder eventually agreed on a premium of £5,000 . If the lease had slipped lower than 80 years, the amount would have increased by a minimum £950.
In 2009 we were e-mailed by Mr and Mrs. J Bonnet who, having was assigned a lease of a ground floor flat in Tal y bont in November 2005. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Similar properties in Tal y bont with a long lease were valued around £191,400. The average ground rent payable was £55 billed yearly. The lease came to a finish on 7 February 2079. Taking into account 54 years unexpired we calculated the compensation to the landlord for the lease extension to be within £34,200 and £39,600 plus costs.
Last Spring we were contacted by Mr and Mrs. E Lefebvre , who purchased a basement flat in Tal y bont in August 2011. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparable residencies in Tal y bont with an extended lease were valued about £295,000. The average amount of ground rent was £45 invoiced every twelve months. The lease ran out in 2099. Given that there were 74 years remaining we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of costs.