It’s an underpublicised truth that a Kidwelly residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Kidwelly property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below 80 years - otherwise a higher premium will be payable. Most leasehold owners in Kidwelly will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold premises in Kidwelly with over one hundred years left 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 |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you increased control over the value of your Kidwelly leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Ibrahim, started to get near to the 80-year threshold with the lease on his first floor apartment in Kidwelly. Having bought his home 18 years ago, the lease term was of little interest. As luck would have it, he recognised he needed to take steps soon on Extending the lease. Ibrahim was able to extend his lease just under the wire last June. Ibrahim and the landlord who owned the flat above subsequently agreed on a premium of £5,000 . If the lease had fallen lower than eighty years, the figure would have gone up by a minimum £1,000.
In 2010 we were contacted by Mr and Mrs. K Lefebvre who, having took over the lease of a purpose-built flat in Kidwelly in November 1999. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by an additional years. Comparable homes in Kidwelly with an extended lease were valued about £210,600. The average ground rent payable was £45 billed every twelve months. The lease lapsed on 21 October 2088. Having 62 years unexpired we estimated the premium to the landlord for the lease extension to be within £18,100 and £20,800 plus costs.
Mr and Mrs. M Ward took over the lease of a first floor flat in Kidwelly in January 2003. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Comparable residencies in Kidwelly with an extended lease were in the region of £265,000. The mid-range ground rent payable was £50 billed quarterly. The lease expired on 12 November 2099. Considering the 73 years unexpired we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of legals.