The value of Trelogan leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the remaining term is less than 80 years
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
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 conveyancing solicitor we work with provide it.
Last Spring David, came critically close to the eighty-year mark with the lease on his basement flat in Trelogan. Having bought his property two decades ago, the length of the lease was of no interest. Luckily, he became aware that he needed to take steps soon on a lease extension. David was able to extend his lease at the eleventh hour last August. David and the freeholder via the management company eventually settled on an amount of £5,000 . If the lease had descended to less than eighty years, the premium would have gone up by a minimum £875.
Dr U Nelson was assigned a lease of a one bedroom apartment in Trelogan in April 2008. The question was if we could approximate the price would be for a ninety year extension to my lease. Identical properties in Trelogan with a long lease were in the region of £290,000. The mid-range ground rent payable was £60 collected every twelve months. The lease lapsed on 17 June 2106. Given that there were 80 years left we approximated the premium to the landlord to extend the lease to be between £13,300 and £15,400 not including expenses.
Last Christmas we were approach by Mr and Mrs. D Gray , who purchased a ground floor flat in Trelogan in March 2008. We are asked if we could estimate the price would likely be to extend the lease by an additional years. Identical flats in Trelogan with 100 year plus lease were valued around £200,800. The average ground rent payable was £65 invoiced per annum. The lease ran out on 16 March 2086. Given that there were 60 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 not including expenses.