Fairwater leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Fairwater tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Fairwater you really ought to investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Fairwater with more than one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Fairwater leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Andrew, started to get near to the 80-year mark with the lease on his first floor apartment in Fairwater. In buying his property twenty years ago, the lease term was of little relevance. Luckily, he noticed he needed to take steps soon on Extending the lease. Andrew extended the lease at the eleventh hour last June. Andrew and the landlord who owned the flat above ultimately agreed on a premium of £5,500 . If he not met the deadline, the sum would have increased by a minimum £925.
Dr Aiden Wood purchased a garden apartment in Fairwater in March 2012. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by 90 years. Identical flats in Fairwater with a long lease were valued about £210,000. The average ground rent payable was £50 billed annually. The lease came to a finish in 2105. Considering the 80 years left we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus professional charges.
Mr and Mrs. T Fournier completed a one bedroom flat in Fairwater in November 1999. The dilemma was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by an additional years. Similar flats in Fairwater with an extended lease were in the region of £275,000. The mid-range ground rent payable was £45 collected every twelve months. The lease expired in 2094. Taking into account 69 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of expenses.