With a long leasehold property in Dolwyddelan, you are in fact renting it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater especially when there are less than eighty years left. Residents in Dolwyddelan with a lease approaching 81 years remaining should seriously consider extending it as soon as possible. Once the lease term has below 80 years remaining, under the relevant statute the landlord can calculate and demand a larger premium, assessed on a technical calculation, strangely termed as “marriage value” which is due.
Leasehold properties in Dolwyddelan with in excess of one hundred years remaining 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 property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The conveyancers that we work with handle Dolwyddelan 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 Ryan, started to get close to the 80-year threshold with the lease on his ground floor apartment in Dolwyddelan. In buying his property two decades ago, the length of the lease was of no bearing. As luck would have it, he recognised he would imminently be paying an inflated amount for a lease extension. Ryan arranged for a lease extension at the eleventh hour last March. Ryan and the landlord in the end settled on the final figure of £5,500 . If he not met the deadline, the amount would have increased by a minimum £1,100.
Last year we were e-mailed by Dr Abbie Garcia , who owned a garden apartment in Dolwyddelan in August 1995. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable residencies in Dolwyddelan with an extended lease were valued around £205,000. The mid-range amount of ground rent was £50 invoiced annually. The lease elapsed in 2104. Taking into account 79 years remaining we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including legals.
In 2012 we were called by Dr Georgina Morel who, having purchased a first floor flat in Dolwyddelan in April 1996. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar flats in Dolwyddelan with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £65 invoiced annually. The lease ran out on 21 June 2093. Taking into account 68 years as a residual term we approximated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including professional charges.