Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will ordinarily be granted for a prescribed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Corwen. Clearly, the period of lease left reduces over time. This is often ignored and only becomes a problem when the flat or house needs to be disposed of or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension. Qualifying leaseholders in Corwen have the legal entitlement to extend the lease for a further ninety years under the 1993 Leasehold Reform Act. Do give due consideration before delaying your Corwen lease extension. Putting off the cost now likely increases the price you will ultimately have to pay for a lease extension
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately 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 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Regardless of whether you are a tenant or a freeholder in Corwen,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Corwen valuers.
Last Autumn Oliver, came dangerously close to the 80-year mark with the lease on his one bedroom flat in Corwen. In buying his flat twenty years ago, the lease term was of minimal significance. Thankfully, he recognised he would soon be paying an inflated amount for Extending the lease. Oliver was able to extend his lease just in the nick of time last January. Oliver and the freeholder via the managing agents subsequently settled on a premium of £6,000 . If the lease had descended to less than eighty years, the figure would have become more exhorbitant by a minimum £1,025.
Dr Harvey Davies purchased a newly refurbished apartment in Corwen in February 2003. The question was if we could approximate the premium would likely be to prolong the lease by an additional years. Comparable homes in Corwen with 100 year plus lease were valued around £260,000. The average amount of ground rent was £50 invoiced yearly. The lease ran out in 2097. Given that there were 72 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including legals.
Last Christmas we were approach by Mr and Mrs. S Martin , who took over the lease of a newly refurbished flat in Corwen in May 1998. We are asked if we could approximate the premium would likely be to extend the lease by ninety years. Comparative flats in Corwen with an extended lease were valued about £261,600. The mid-range ground rent payable was £60 billed quarterly. The lease terminated in 2077. Taking into account 52 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £39,000 and £45,000 plus costs.