Tredegar leases on residential deteriorating in value. Where your lease has approximately ninety years left, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease dips below this level then you start incurring an additional element called marriage value. Flat owners in Tredegar will usually qualify for a lease extension; however a solicitor will check if you qualify. In some situations you may not qualify. There are also strict timetables and formalities to follow once the process is triggered so it’s sensible to be guided by a lawyer during the process.
Leasehold properties in Tredegar with in excess of 100 years unexpired 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 property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Retaining our service will provide you better control over the value of your Tredegar leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Milo, came critically near to the eighty-year threshold with the lease on his two bedroom apartment in Tredegar. Having bought his home 18 years ago, the lease term was of no bearing. As luck would have it, it dawned on him that he would soon be paying an inflated amount for Extending the lease. Milo arranged for a lease extension at the eleventh hour in March. Milo and the freeholder eventually agreed on sum of £5,000 . If the lease had slipped below eighty years, the price would have increased by at least £1,125.
In 2014 we were approached by Mrs Alisha Turner who, having moved into a garden apartment in Tredegar in January 2008. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Similar flats in Tredegar with an extended lease were valued around £233,200. The average ground rent payable was £60 billed quarterly. The lease lapsed in 2086. Considering the 61 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £22,800 and £26,400 not including expenses.
Last year we were called by Mr and Mrs. M Martínez , who acquired a one bedroom apartment in Tredegar in February 2000. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Comparative homes in Tredegar with 100 year plus lease were in the region of £171,800. The mid-range amount of ground rent was £55 collected monthly. The lease end date was in 2075. Having 50 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 plus legals.