Main reasons to commence your Colwyn Bay lease extension
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Why you should commence your Colwyn Bay lease extension today: </h3>
<h4> A <a href="http://www.lendermonitor.com/conveyancing/loc/colwyn-bay">Colwyn Bay</a> lease depreciates with the years remaining on the lease.
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<p> The re-sale value of a leasehold property in Colwyn Bay depends on how long the lease has left to run. If it is close to or less than eighty years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. It is preferable to commence the lease extension process when the lease still has 82 years remaining so that a lease extension can be finalised ahead of the 80 year cut off point. Statute enables Colwyn Bay qualifying lessees to an additional term of 90 years over and above the unexpired term, at a nominal rent (no ground rent). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension. <h4>Colwyn Bay property with a lease extension is almost the same value as a freehold</h4>
<p> It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for many years in the future.
<h4>Lending institutions may decide not to lend on a short lease</h4> Mortgage lenders have set criteria when loaning monies charged on leasehold property. Some will simply refrain from lending at all once the residual lease term falls under a certain unexpired lease term. Many Mortgage lenders will not regard property with a remaining term of less than 75 years as adequate security. In addition to this being important when selling, it is also relevant if you are intending to remortgage your Colwyn Bay home.
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<td>Barclays plc</td>
<td> Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below).<br /><br />Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office.<br /><br />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:<br /><br />• 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<br />• The value of the property subject to the short remaining term is £500,000 or more AND<br />• 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;
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<td>Halifax</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>The Mortgage Works</td>
<td> Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. <br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 70 years<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 70 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office): <br />- Unexpired lease term greater than 85 years<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (will be declined):<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house <br />- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house <br />- A lease subject to a peppercorn ground rent (annual rent) charges <br /><br />For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? <br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years<br /><br />LEASE EXTENSIONS<br /><br />We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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<td>Royal Bank of Scotland</td>
<td> Mortgage term plus 30 years.
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<td>Yorkshire Building Society</td>
<td> 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.
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Why use us for your lease extension in Colwyn Bay? </h4>
<p> Using our service will provide you enhanced control over the value of your Colwyn Bay leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell.
The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions. <h4>
Colwyn Bay Lease Extension Case Summaries:
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<h5> Sophia, Colwyn Bay, Conwy,</h5>
<p> Following protracted negotiations with the freeholder of her two bedroom apartment in Colwyn Bay, Sophia commenced the lease extension process as the eighty year deadline was quickly nearing. The lease extension completed in June 2008. The freeholder’s fees were kept to an absolute minimum.
<h5>Colwyn Bay case:</h5>
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Last Winter we were contacted by Mr and Mrs. S López , who
owned a one bedroom flat in Colwyn Bay in April 2009. The dilemma was if we could approximate the price would be for a 90 year lease extension. Comparable residencies in Colwyn Bay with 100 year plus lease were in the region of £295,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease ran out on 10 October 2100. Taking into account 74 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus legals.
<h5>Colwyn Bay case:</h5>
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In 2009 we were e-mailed by Mr and Mrs. Y Anderson who, having purchased a studio apartment in Colwyn Bay in May 2003. We are asked if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparable flats in Colwyn Bay with an extended lease were worth £243,000. The mid-range amount of ground rent was £65 invoiced monthly. The lease ran out on 10 May 2089. Given that there were 63 years unexpired we approximated the premium to the landlord to extend the lease to be between £20,000 and £23,000 plus fees.
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