For anyone whose Trefnant home is held on a long lease, our message is clear – if no remedial action is taken, the property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold premises in Trefnant with over 100 years remaining on the lease are sometimes 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 to be gained by purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
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.
Joshua was the the leasehold proprietor of a high value flat in Trefnant being sold with a lease of a few days over 61 years remaining. Joshua informally spoke with his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Joshua to exercise his statutory right. Joshua procured expert legal guidance and secured an acceptable deal without going to tribunal and readily saleable.
Last month we were approach by Mr and Mrs. I Moore , who moved into a purpose-built apartment in Trefnant in July 1997. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Identical properties in Trefnant with a long lease were in the region of £183,600. The average amount of ground rent was £65 collected monthly. The lease elapsed in 2083. Having 57 years remaining we estimated the premium to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of legals.
In 2011 we were contacted by Mr Kai Bonnet who, having moved into a one bedroom flat in Trefnant in May 1999. The question was if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparable homes in Trefnant with an extended lease were valued about £245,000. The average ground rent payable was £50 billed per annum. The lease lapsed in 2094. Considering the 68 years outstanding we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of fees.