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 not fully appreciated in the first few years due to the reduction 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 dips under 80 years - otherwise a higher premium will be payable. The majority of flat owners in Trefnant will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
Leasehold premises in Trefnant 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 premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 conveyancers that we work with procure Trefnant 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 lawyer we work with provide it.
Elijah owned a 2 bedroom apartment in Trefnant on the market with a lease of fraction over 59 years remaining. Elijah on an informal basis contacted his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Elijah to invoke his statutory right. Elijah obtained expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last Winter we were contacted by Mr and Mrs. E Sharif , who owned a one bedroom apartment in Trefnant in August 2009. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparative premises in Trefnant with 100 year plus lease were valued about £264,000. The mid-range amount of ground rent was £60 billed quarterly. The lease terminated on 23 May 2079. Taking into account 53 years unexpired we approximated the premium to the landlord to extend the lease to be within £37,100 and £42,800 plus professional charges.
In 2011 we were contacted by Mrs N Bertrand who, having bought a purpose-built flat in Trefnant in April 2012. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by 90 years. Comparable residencies in Trefnant with 100 year plus lease were worth £220,400. The average ground rent payable was £45 invoiced per annum. The lease elapsed in 2090. Having 64 years left we calculated the premium to the freeholder to extend the lease to be within £16,200 and £18,600 exclusive of legals.