Unfortunately that a Arthog 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 first few years due to the loss of value being disguised by increases in the Arthog property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term drops below 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Arthog will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 conveyancing solicitors that we work with procure Arthog 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.
Jason owned a studio apartment in Arthog on the market with a lease of fraction over 59 years left. Jason on an informal basis contacted his freeholder a well known London-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jason to exercise his statutory right. Jason obtained expert legal guidance and was able to make an informed decision and deal with the matter and sell the property.
In 2012 we were e-mailed by Mrs Gemma Cox who, having completed a first floor apartment in Arthog in September 2003. We are asked if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Identical residencies in Arthog with a long lease were valued around £245,000. The mid-range amount of ground rent was £45 invoiced annually. The lease ran out in 2093. Given that there were 68 years left we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including professional charges.
Mr and Mrs. D Richardson acquired a one bedroom flat in Arthog in March 1995. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Comparative residencies in Arthog with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £55 collected yearly. The lease lapsed on 2 November 2104. Taking into account 79 years as a residual term we estimated the premium to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of costs.