For those whose Kidwelly flat is held on a long lease, the message is clear – if no remedial action is taken, the property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to procure a lease extension.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you better control over the value of your Kidwelly leasehold, as your property will be more valuable and marketable in relation to the lease length should you want 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 unsuccessful correspondence with the landlord of her ground floor apartment in Kidwelly, Lily started the lease extension process just as the lease was coming close to the all-important 80-year deadline. The legal work completed in February 2015. The landlord’s fees were negotiated to under 700 GBP.
Mr Cameron Martinez was assigned a lease of a basement flat in Kidwelly in February 2004. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparable residencies in Kidwelly with a long lease were in the region of £261,600. The average ground rent payable was £60 invoiced annually. The lease terminated in 2078. Given that there were 52 years left we estimated the compensation to the freeholder to extend the lease to be within £39,000 and £45,000 plus expenses.
In 2012 we were e-mailed by Mrs V Bennett who, having acquired a garden apartment in Kidwelly in November 2001. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by 90 years. Similar premises in Kidwelly with 100 year plus lease were valued around £218,000. The average ground rent payable was £45 billed yearly. The lease lapsed on 11 September 2089. Given that there were 63 years as a residual term we approximated the premium to the landlord to extend the lease to be within £17,100 and £19,800 exclusive of costs.