It’s an underpublicised certainty that a Blackwood residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Blackwood property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term falls below eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Blackwood will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold premises in Blackwood with over one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Blackwood 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 conveyancer we work with provide it.
Last October Alfie, started to get near to the eighty-year mark with the lease on his studio flat in Blackwood. Having bought his home two decades ago, the lease term was of no interest. Fortunately, he noticed he would soon be paying way over the odds for Extending the lease. Alfie extended the lease at the eleventh hour last January. Alfie and the landlord subsequently agreed on a premium of £5,500 . If the lease had slipped lower than eighty years, the premium would have escalated by at least £975.
In 2012 we were called by Dr Adam Moreau who, having completed a ground floor flat in Blackwood in August 1995. The question was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Identical properties in Blackwood with a long lease were worth £200,000. The mid-range ground rent payable was £50 collected quarterly. The lease end date was in 2102. Considering the 77 years left we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of expenses.
Mr H Moreau owned a newly refurbished flat in Blackwood in February 1995. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparable residencies in Blackwood with a long lease were worth £260,200. The average ground rent payable was £65 invoiced quarterly. The lease end date was in 2091. Given that there were 66 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £14,300 and £16,400 exclusive of costs.