It’s an underpublicised certainty that a Tredegar residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Tredegar property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term dips under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Tredegar will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold properties in Tredegar with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Tredegar,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Tredegar valuers.
During the course of the last few months Archie, came very near to the 80-year threshold with the lease on his first floor apartment in Tredegar. In buying his flat 19 years previously, the lease term was of no importance. Thankfully, he realised he would soon be paying an inflated amount for Extending the lease. Archie extended the lease at the eleventh hour last May. Archie and the freeholder subsequently agreed on the final figure of £5,000 . If he failed to meet the deadline, the price would have gone up by at least £1,025.
In 2010 we were contacted by Mr and Mrs. M Cook who, having owned a garden flat in Tredegar in October 2003. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by ninety years. Comparable properties in Tredegar with a long lease were valued about £208,600. The mid-range amount of ground rent was £60 billed quarterly. The lease terminated in 2081. Having 57 years remaining we approximated the premium to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of costs.
Last September we were contacted by Mr Max Gunderson , who completed a basement flat in Tredegar in September 2010. The question was if we could approximate the premium could be to extend the lease by 90 years. Comparative properties in Tredegar with an extended lease were valued about £200,000. The average ground rent payable was £50 invoiced yearly. The lease end date was on 21 February 2101. Taking into account 77 years remaining we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including professional charges.