Llanarth leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Llanarth tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Llanarth 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 cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you increased control over the value of your Llanarth leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Luke was the the leasehold owner of a 2 bedroom apartment in Llanarth being marketed with a lease of just over 72 years left. Luke informally contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Luke to invoke his statutory right. Luke procured expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Dr Millie Wright bought a basement flat in Llanarth in September 1998. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Comparative flats in Llanarth with 100 year plus lease were valued around £166,400. The average amount of ground rent was £60 invoiced yearly. The lease elapsed in 2079. Taking into account 54 years unexpired we approximated the premium to the landlord for the lease extension to be between £32,300 and £37,400 not including professional charges.
Last Winter we were e-mailed by Mr and Mrs. H Taylor , who owned a one bedroom apartment in Llanarth in September 2010. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Similar homes in Llanarth with a long lease were in the region of £232,800. The average ground rent payable was £45 invoiced annually. The lease finished on 23 August 2090. Given that there were 65 years unexpired we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of costs.