The re-sale value of a leasehold property in Trelogan depends on how many years the lease has left to run. If it is close to or fewer than eighty years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is ideal to start the lease extension process when the lease still has 82 years unexpired so that a lease extension can be concluded ahead of the eighty year threshold. Current legislation enables Trelogan qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
Lease extensions in Trelogan can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Trelogan lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Gabriel owned a studio flat in Trelogan on the market with a lease of fraction over 72 years unexpired. Gabriel informally approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of 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 Gabriel to invoke his statutory right. Gabriel obtained expert advice and was able to make an informed judgement and deal with the matter and sell the property.
In 2012 we were contacted by Dr Rachel Walker who, having purchased a purpose-built apartment in Trelogan in January 2001. The question was if we could approximate the price would likely be for a ninety year extension to my lease. Identical premises in Trelogan with an extended lease were in the region of £280,000. The average ground rent payable was £55 invoiced yearly. The lease termination date was on 1 January 2103. Taking into account 78 years remaining we calculated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of professional charges.
In 2010 we were called by Dr Samuel Anderson who, having took over the lease of a studio flat in Trelogan in May 1997. We are asked if we could estimate the premium would likely be to extend the lease by an additional years. Comparable flats in Trelogan with 100 year plus lease were worth £191,000. The mid-range amount of ground rent was £65 billed quarterly. The lease ended in 2083. Given that there were 58 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £23,800 and £27,400 not including costs.