With a residential leasehold premises in Deganwy, you effectively rent it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than 80 years remaining. Residents in Deganwy with a lease drawing near to 81 years left should seriously think of extending it sooner than later. Once the lease term has fewer than 80 years outstanding, under the current statute the freeholder is entitled to calculate and levy a greater amount, assessed on a technical calculation, known as “marriage value” which is payable.
Leasehold residencies in Deganwy with over 100 years left 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 purchasing the freehold unless savings on ground rent and service charges justify it.
| 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The conveyancing solicitors that we work with procure Deganwy 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 conveyancing solicitor we work with provide it.
Oscar owned a studio flat in Deganwy on the market with a lease of just over 72 years remaining. Oscar informally contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Oscar to invoke his statutory right. Oscar procured expert advice and was able to make an informed judgement and handle with the matter and sell the flat.
Last Spring we were phoned by Dr Y Sánchez , who acquired a ground floor flat in Deganwy in August 2010. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by 90 years. Comparative residencies in Deganwy with 100 year plus lease were in the region of £240,600. The mid-range ground rent payable was £60 collected annually. The lease finished on 4 June 2087. Considering the 62 years left we approximated the premium to the landlord for the lease extension to be between £21,900 and £25,200 exclusive of professional charges.
Last July we were called by Mr and Mrs. B Nguyen , who completed a one bedroom apartment in Deganwy in September 2005. We are asked if we could approximate the premium would be for a ninety year lease extension. Comparative premises in Deganwy with a long lease were in the region of £174,200. The mid-range ground rent payable was £55 billed annually. The lease ran out in 2076. Taking into account 51 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of fees.