Gower leases on residential deteriorating in value. Where your lease has in the region of ninety years left, you should start thinking about a lease extension. 80 years is a significant number: when the unexpired term of a lease drops below this level then you begin incurring an additional element called marriage value. Flat owners in Gower will usually be legally entitled to a lease extension; however a solicitor will check your eligibility. In certain circumstances you may not qualify. There are prescribed deadlines and procedures to follow once the process is triggered so it’s prudent to be guided by a conveyancing solicitor during the process.
Leasehold properties in Gower with over one hundred years unexpired 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 upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Godiva Mortgages | 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. |
| 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 |
| 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 increased control over the value of your Gower leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Aaron owned a 2 bedroom flat in Gower being sold with a lease of a few days over 61 years outstanding. Aaron on an informal basis spoke with his landlord being a well known Manchester-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 on the basis of a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Aaron to invoke his statutory right. Aaron obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
In 2012 we were called by Ms Rebecca Young who, having took over the lease of a one bedroom flat in Gower in March 2003. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical residencies in Gower with 100 year plus lease were worth £260,000. The average ground rent payable was £50 billed annually. The lease came to a finish on 15 October 2098. Given that there were 72 years remaining we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus expenses.
In 2011 we were phoned by Ms Alice Lewis who, having took over the lease of a first floor flat in Gower in September 2002. The question was if we could estimate the premium could be to prolong the lease by 90 years. Identical premises in Gower with 100 year plus lease were worth £256,600. The average ground rent payable was £60 billed yearly. The lease expired in 2078. Given that there were 52 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £41,800 and £48,400 exclusive of legals.