When it comes to residential leasehold premises in Deganwy, you are in fact renting it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive particularly when there are less than eighty years remaining. Anyone in Deganwy with a lease approaching 81 years unexpired should seriously consider extending it without delay. Once a lease has below eighty years outstanding, under the current legislation the freeholder can calculate and charge a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold residencies in Deganwy with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with undertake Deganwy 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.
Leo owned a studio flat in Deganwy on the market with a lease of fraction over fifty eight years unexpired. Leo on an informal basis spoke with his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Leo to exercise his statutory right. Leo procured expert legal guidance and was able to make an informed judgement and deal with the matter and sell the flat.
Mr Tommy Watson bought a basement apartment in Deganwy in July 2012. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparable homes in Deganwy with a long lease were valued about £295,000. The mid-range amount of ground rent was £45 collected quarterly. The lease lapsed in 2099. Given that there were 74 years remaining we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus expenses.
Mr and Mrs. S Howard purchased a newly refurbished flat in Deganwy in February 2002. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Comparable homes in Deganwy with 100 year plus lease were in the region of £243,000. The average ground rent payable was £65 billed annually. The lease terminated on 17 June 2088. Having 63 years left we approximated the premium to the landlord to extend the lease to be between £20,000 and £23,000 exclusive of legals.