Unfortunately that a Trelogan residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Trelogan property prices.Where your lease has approximately ninety 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 slips lower than 80 years - otherwise a higher premium will be due. The majority of flat owners in Trelogan will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancer for the duration of the formalities.
It is generally accepted that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
The conveyancers that we work with undertake Trelogan 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.
Lewis owned a studio apartment in Trelogan being marketed with a lease of just over 59 years outstanding. Lewis informally approached his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Lewis to exercise his statutory right. Lewis obtained expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.
In 2012 we were contacted by Mr R Bennett who, having bought a ground floor flat in Trelogan in October 2008. The dilemma was if we could shed any light on how much (roughly) premium could be to prolong the lease by a further 90 years. Comparative properties in Trelogan with 100 year plus lease were valued about £255,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease ran out in 2095. Having 70 years outstanding we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including professional charges.
Last August we were called by Dr Sam García , who completed a ground floor apartment in Trelogan in November 2005. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Similar homes in Trelogan with 100 year plus lease were worth £246,800. The average ground rent payable was £60 invoiced yearly. The lease termination date was in 2075. Considering the 50 years outstanding we approximated the premium to the freeholder to extend the lease to be between £44,700 and £51,600 not including professional charges.