Chances are that where you own a flat in Borth you actually own a long leasehold interest over your property
Leasehold residencies in Borth with over one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 handle Borth 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.
Half a year ago Leo, came precariously near to the 80-year mark with the lease on his basement apartment in Borth. In buying his home two decades ago, the length of the lease was of minimal significance. Fortunately, he realised he needed to take action soon on a lease extension. Leo was able to extend his lease just under the wire last May. Leo and the landlord in the end agreed on a premium of £5,500 . If the lease had slipped to less than 80 years, the figure would have increased by a minimum £950.
In 2010 we were e-mailed by Mr Harry Norbert who, having completed a one bedroom apartment in Borth in August 1999. The question was if we could approximate the price would likely be to prolong the lease by ninety years. Comparable residencies in Borth with an extended lease were in the region of £250,000. The mid-range ground rent payable was £50 billed quarterly. The lease finished on 18 September 2094. Given that there were 69 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including professional charges.
In 2011 we were called by Ms M Fournier who, having was assigned a lease of a studio apartment in Borth in February 2006. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year extension to my lease. Identical residencies in Borth with a long lease were valued around £285,000. The mid-range ground rent payable was £55 invoiced monthly. The lease lapsed in 2105. Having 80 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of professional charges.