It’s an underpublicised truth that a Tredegar residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Tredegar property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining falls under eighty years, you will end up paying 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 Most flat owners in Tredegar will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 |
| 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. |
The conveyancing solicitors that we work with procure Tredegar 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 conveyancer we work with provide it.
Hugo was the the leasehold proprietor of a studio apartment in Tredegar being marketed with a lease of fraction over 59 years outstanding. Hugo informally spoke with his landlord being a well known London-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Hugo to exercise his statutory right. Hugo obtained expert advice and secured an acceptable resolution without resorting to tribunal and ending up with a market value flat.
In 2014 we were contacted by Mr and Mrs. E Thomas who, having acquired a purpose-built flat in Tredegar in January 2010. The dilemma was if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Comparative properties in Tredegar with an extended lease were valued about £290,000. The mid-range ground rent payable was £45 collected monthly. The lease expiry date was in 2098. Given that there were 73 years unexpired we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
Ms Amy Evans purchased a ground floor flat in Tredegar in August 1998. The dilemma was if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Comparable properties in Tredegar with a long lease were valued around £240,600. The mid-range ground rent payable was £60 invoiced monthly. The lease expired in 2087. Taking into account 62 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 plus expenses.