With a long leasehold premises in Carmarthen, you are in fact renting it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately greater particularly when there are less than 80 years left. Residents in Carmarthen with a lease drawing near to 81 years unexpired should seriously consider extending it as soon as possible. Once the lease term has under eighty years left, under the current Act the landlord can calculate and demand a greater premium, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Lloyds TSB Scotland | 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. |
| Yorkshire 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. |
Lease extensions in Carmarthen can be a difficult process. We recommend you get professional help from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Carmarthen lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months George, started to get near to the eighty-year mark with the lease on his leasehold flat in Carmarthen. Having purchased his flat 18 years previously, the length of the lease was of minimal relevance. Thankfully, it dawned on him that he would soon be paying an escalated premium for a lease extension. George arranged for a lease extension just in the nick of time in August. George and the landlord in the end settled on an amount of £6,000 . If the lease had fallen lower than 80 years, the price would have become more costly by at least £950.
Mr N Moore owned a ground floor flat in Carmarthen in September 2010. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Identical premises in Carmarthen with an extended lease were worth £245,000. The average ground rent payable was £50 invoiced quarterly. The lease expired on 26 September 2093. Given that there were 68 years left we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus professional charges.
In 2009 we were called by Ms Melissa White who, having acquired a studio flat in Carmarthen in August 2005. The question was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparable residencies in Carmarthen with 100 year plus lease were in the region of £285,000. The mid-range amount of ground rent was £55 billed monthly. The lease expiry date was on 26 September 2104. Having 79 years left we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including fees.