When it comes to domestic leasehold property in Colwyn Bay, you are actually buying an entitlement to reside in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive particularly once there are less than 80 years left. Residents in Colwyn Bay with a lease drawing near to 81 years left should seriously consider extending it without delay. Once a lease has under 80 years remaining, under the current Act the freeholder can calculate and demand a greater premium, assessed on a technical computation, known as “marriage value” which is payable.
Leasehold properties in Colwyn Bay with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Chelsea 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. |
| Coventry Building Society | 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. |
| 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. |
The conveyancers that we work with undertake Colwyn Bay 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 lawyer we work with provide it.
In 2014 Archie, came very near to the eighty-year threshold with the lease on his one bedroom flat in Colwyn Bay. Having purchased his property two decades ago, the unexpired term was of no bearing. Luckily, he recognised he would imminently be paying an inflated amount for Extending the lease. Archie extended the lease just in the nick of time last September. Archie and the freeholder via the managing agents subsequently agreed on sum of £5,000 . If he had missed the deadline, the price would have escalated by a minimum £1,050.
Mr and Mrs. T Adams was assigned a lease of a recently refurbished flat in Colwyn Bay in March 1998. The question was if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Identical flats in Colwyn Bay with an extended lease were worth £210,000. The average amount of ground rent was £50 invoiced monthly. The lease elapsed on 14 May 2105. Given that there were 80 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 plus legals.
Mr and Mrs. W David moved into a basement apartment in Colwyn Bay in September 2001. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Comparative flats in Colwyn Bay with an extended lease were worth £275,000. The mid-range ground rent payable was £45 collected quarterly. The lease expired on 19 October 2094. Taking into account 69 years unexpired we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus professional charges.