There is no doubt about it a leasehold flat or house in Deganwy is a wasting asset as a result of the diminishing lease term. If the lease has, in excess of one hundred years remaining then this decrease may be negligible nevertheless there will become a point in time when a lease has less than eighty years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main reason why you should consider extending without delay. Many flat owners in Deganwy will qualify for this right; that being said a conveyancing solicitor will be able to confirm whether you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancers 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 was the the leasehold proprietor of a conversion flat in Deganwy being marketed with a lease of just over 72 years unexpired. Leo informally approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £100 per annum. Ordinarily, ground rent would not be due on a lease extension were Leo to invoke his statutory right. Leo obtained expert advice and secured an acceptable deal informally and readily saleable.
Last Christmas we were contacted by Mr O Sánchez , who purchased a ground floor flat in Deganwy in March 2006. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Comparable residencies in Deganwy with a long lease were valued about £300,000. The average ground rent payable was £50 collected every twelve months. The lease ran out on 18 March 2101. Considering the 76 years unexpired we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including fees.
Dr Isaac Bernard bought a garden apartment in Deganwy in March 1995. We are asked if we could approximate the price would be to extend the lease by a further 90 years. Similar premises in Deganwy with a long lease were in the region of £257,800. The average amount of ground rent was £65 billed quarterly. The lease expired in 2090. Taking into account 65 years outstanding we calculated the premium to the landlord for the lease extension to be within £17,100 and £19,800 plus legals.