Unfortunately that a Trefnant 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 deflation being disguised by increases in the Trefnant property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher amount will be due. Most flat owners in Trefnant will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a landlord in Trefnant,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 experience and the close ties they enjoy with Trefnant valuers.
In the wake of 9 months of unsuccessful correspondence with the landlord of her leasehold apartment in Trefnant, Rachael commenced the lease extension process just as the lease was coming close to the crucial 80-year mark. The transaction was finalised in November 2011. The freeholder’s costs were kept to an absolute minimum.
Last Christmas we were contacted by Dr Eli Cox , who bought a basement apartment in Trefnant in March 1995. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Comparable homes in Trefnant with a long lease were worth £203,200. The average amount of ground rent was £65 billed monthly. The lease concluded in 2087. Having 61 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £19,000 and £22,000 exclusive of fees.
In 2014 we were approached by Mr Jake Davis who, having completed a purpose-built apartment in Trefnant in March 2004. We are asked if we could shed any light on how much (roughly) price could be to prolong the lease by ninety years. Similar homes in Trefnant with 100 year plus lease were valued about £260,000. The mid-range ground rent payable was £50 invoiced per annum. The lease finished on 5 February 2098. Having 72 years unexpired we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.