Talsarnau 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 Talsarnau tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Talsarnau you really ought to check if your lease has between seventy and ninety years left. There are good reasons why a Talsarnau flat owner with a lease having around 80 years unexpired should take action to make sure that a lease extension is actioned without delay
Leasehold residencies in Talsarnau with in excess of 100 years unexpired 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 circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Talsarnau 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.
Last Summer Stanley, started to get close to the 80-year threshold with the lease on his purpose- built flat in Talsarnau. In buying his flat 18 years previously, the unexpired term was of little significance. Fortunately, it dawned on him that he needed to take action soon on Extending the lease. Stanley extended the lease just under the wire last April. Stanley and the freeholder ultimately agreed on an amount of £5,000 . If the lease had fallen below eighty years, the price would have escalated by a minimum £1,125.
In 2014 we were contacted by Dr V Brown who, having bought a recently refurbished apartment in Talsarnau in October 1995. The dilemma was if we could estimate the price would be for a ninety year extension to my lease. Similar residencies in Talsarnau with a long lease were valued about £300,000. The average amount of ground rent was £50 billed per annum. The lease lapsed on 28 February 2101. Taking into account 76 years unexpired we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of professional charges.
In 2014 we were contacted by Mr and Mrs. Y Torres who, having acquired a ground floor apartment in Talsarnau in August 2010. The question was if we could shed any light on how much (approximately) price could be for a 90 year lease extension. Similar flats in Talsarnau with a long lease were worth £257,800. The average ground rent payable was £65 collected monthly. The lease came to a finish on 12 November 2090. Given that there were 65 years outstanding we approximated the compensation to the landlord for the lease extension to be between £18,100 and £20,800 exclusive of expenses.