The market value of a leasehold property in Towyn is impacted by how many years the lease has left to run. If it is close to or less than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. Ideally one should start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be concluded prior to the 80 year mark. Current legislation entitles Towyn qualifying lessees to obtain a lease extension of 90 years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for many years in the future.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Towyn,the lease extension lawyers 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 Towyn valuers.
Following unsuccessful negotiations with the landlord of her studio flat in Towyn, Natalie commenced the lease extension process as the eighty year threshold was swiftly approaching. The lease extension was finalised in May 2014. The freeholder’s fees were negotiated to approximately 600 pounds.
In 2011 we were called by Mr and Mrs. R Taylor who, having took over the lease of a garden apartment in Towyn in May 2011. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Comparative homes in Towyn with a long lease were worth £203,200. The average ground rent payable was £65 collected monthly. The lease concluded in 2085. Having 61 years unexpired we approximated the premium to the landlord for the lease extension to be between £19,000 and £22,000 not including professional charges.
Last Spring we were e-mailed by Ms G Thompson , who owned a garden apartment in Towyn in September 2005. The question was if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Comparable homes in Towyn with a long lease were in the region of £260,000. The average amount of ground rent was £50 invoiced yearly. The lease lapsed in 2096. Having 72 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus professional charges.