For anyone whose Tredegar property is held on a long lease, our message is clear – if no remedial action is taken, your property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Tredegar,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Tredegar valuers.
Lucas owned a 2 bedroom apartment in Tredegar being marketed with a lease of a few days over 59 years left. Lucas informally contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Lucas to exercise his statutory right. Lucas obtained expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
Last Winter we were contacted by Mrs Ella Carter , who completed a one bedroom apartment in Tredegar in August 1996. We are asked if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Identical premises in Tredegar with a long lease were in the region of £171,800. The average ground rent payable was £55 invoiced quarterly. The lease expiry date was in 2075. Having 50 years left we estimated the compensation to the landlord for the lease extension to be within £33,300 and £38,400 not including costs.
In 2013 we were called by Mr H Díaz who, having bought a purpose-built flat in Tredegar in July 2009. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by 90 years. Comparative properties in Tredegar with 100 year plus lease were worth £280,000. The average ground rent payable was £45 invoiced per annum. The lease expiry date was on 5 January 2095. Considering the 70 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus expenses.