When it comes to domestic leasehold property in Deganwy, you are actually purchasing a right to reside in a property for a set period of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater particularly when there are fewer than eighty years remaining. Residents in Deganwy with a lease approaching 81 years unexpired should seriously think of extending it sooner as opposed to later. When the lease term has less than 80 years left, under the relevant legislation the freeholder is entitled to calculate and demand a greater premium, assessed on a technical calculation, known as “marriage value” which is payable.
It is generally considered that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
The lawyers that we work with handle 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 lawyer we work with provide it.
Two years ago Charlie, started to get near to the eighty-year mark with the lease on his two bedroom flat in Deganwy. Having purchased his property two decades ago, the unexpired term was of no relevance. Thankfully, he became aware that he needed to take action soon on a lease extension. Charlie extended the lease just under the wire in August. Charlie and the freeholder via the managing agents ultimately settled on sum of £5,000 . If the lease had dipped below eighty years, the figure would have gone up by at least £1,000.
In 2012 we were e-mailed by Mr and Mrs. S André who, having purchased a studio flat in Deganwy in October 2001. We are asked if we could approximate the price would likely be to extend the lease by a further 90 years. Comparable residencies in Deganwy with 100 year plus lease were valued about £280,000. The mid-range amount of ground rent was £45 invoiced monthly. The lease termination date was on 3 January 2095. Taking into account 70 years unexpired we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus expenses.
Last Christmas we were called by Dr W Johnson , who purchased a one bedroom apartment in Deganwy in October 1997. The dilemma was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by a further 90 years. Similar residencies in Deganwy with an extended lease were valued about £223,400. The mid-range ground rent payable was £60 invoiced per annum. The lease expired in 2084. Taking into account 59 years left we calculated the compensation to the freeholder for the lease extension to be within £27,600 and £31,800 not including professional charges.