Deganwy leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Deganwy tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Deganwy you must check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
Using our service gives you increased control over the value of your Deganwy leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy discussions with the freeholder of her ground floor apartment in Deganwy, Kelsey initiated the lease extension process as the 80 year threshold was rapidly coming. The lease extension was finalised in April 2010. The freeholder’s costs were kept to an absolute minimum.
In 2013 we were phoned by Mr Aarav Mason who, having acquired a studio apartment in Deganwy in January 2007. We are asked if we could estimate the premium would likely be for a 90 year extension to my lease. Similar flats in Deganwy with a long lease were valued about £171,800. The mid-range ground rent payable was £55 invoiced every twelve months. The lease end date was in 2075. Having 50 years unexpired we estimated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 plus costs.
Mr and Mrs. Y Bennett moved into a one bedroom flat in Deganwy in November 2007. The question was if we could estimate the price would be for a 90 year extension to my lease. Comparable flats in Deganwy with an extended lease were valued about £280,000. The mid-range ground rent payable was £45 billed quarterly. The lease termination date was on 11 November 2095. Given that there were 70 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of fees.