There is no doubt about it a leasehold flat or house in Fairwater is a wasting asset as a result of the shortening lease. Where the residual term has, over 125 years remaining then this decrease may be of little impact nevertheless there will become a stage when a lease has under than eighty years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main rational as to why you should consider extending sooner than later. The majority of flat owners in Fairwater will qualify for this right; however a conveyancer will be able to advise if you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold residencies in Fairwater with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage 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. |
The conveyancing solicitors that we work with undertake Fairwater 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 lawyer we work with provide it.
Jamie was the the leasehold proprietor of a 2 bedroom flat in Fairwater on the market with a lease of just over 72 years outstanding. Jamie on an informal basis contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jamie to invoke his statutory right. Jamie obtained expert legal guidance and secured satisfactory deal without going to tribunal and readily saleable.
In 2010 we were approached by Dr W Ward who, having took over the lease of a ground floor flat in Fairwater in July 2000. The dilemma was if we could shed any light on how much (approximately) price could be for a ninety year extension to my lease. Comparable premises in Fairwater with a long lease were in the region of £240,600. The mid-range ground rent payable was £60 collected quarterly. The lease terminated on 11 March 2088. Taking into account 62 years outstanding we calculated the premium to the freeholder to extend the lease to be between £21,900 and £25,200 exclusive of fees.
Last Spring we were contacted by Dr B Stewart , who completed a ground floor apartment in Fairwater in April 2004. The question was if we could estimate the premium would likely be for a 90 year extension to my lease. Comparative residencies in Fairwater with a long lease were valued around £174,200. The average amount of ground rent was £55 collected monthly. The lease finished in 2077. Given that there were 51 years as a residual term we approximated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of professional charges.