There is no doubt about it a leasehold flat or house in Blackwood is a wasting asset as a result of the diminishing lease term. If the residual term has, in excess of 99 years to run then this decrease may be fractional nevertheless there will become a stage when a lease has fewer than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the primary rational as to why you should extend the lease sooner than later. Many flat owners in Blackwood will qualify for this right; nevertheless a lawyer will be able to confirm whether you qualify to extend your lease. 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.
Leasehold properties in Blackwood with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
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 lawyer we work with provide it.
In 2014 Freddie, came perilously near to the 80-year threshold with the lease on his basement flat in Blackwood. Having purchased his home two decades ago, the lease term was of no relevance. Luckily, he recognised he would soon be paying way over the odds for Extending the lease. Freddie arranged for a lease extension at the eleventh hour last August. Freddie and the landlord ultimately agreed on the final figure of £5,500 . If he had missed the deadline, the amount would have gone up by a minimum £850.
Last year we were approach by Mr Benjamin Morris , who was assigned a lease of a first floor flat in Blackwood in January 2007. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year lease extension. Similar properties in Blackwood with an extended lease were valued about £205,000. The mid-range ground rent payable was £50 collected monthly. The lease elapsed on 10 January 2105. Taking into account 79 years unexpired we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.
In 2009 we were approached by Mr and Mrs. V Ward who, having bought a garden flat in Blackwood in September 2008. The question was if we could estimate the premium would likely be for a ninety year lease extension. Identical premises in Blackwood with 100 year plus lease were in the region of £275,000. The average ground rent payable was £65 invoiced per annum. The lease ran out in 2094. Given that there were 68 years left we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including legals.