There is no doubt about it a leasehold flat or house in Gower is a wasting asset as a result of the diminishing lease term. If the residual term has, beyond 125 years to run then this decrease may be of little impact that being said there will become a point in time when a lease has less than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary reason why you should consider extending without delay. Many flat owners in Gower will meet the qualifying criteria; however a conveyancer will be able to confirm if you are eligible for a lease extension. In certain 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 Gower with more than 100 years remaining on the lease are often referred to as ‘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 buying the reversionary interest unless savings on ground rent and service charges justify 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. |
| 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. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Gower can be a difficult process. We recommend you secure guidance from a conveyancer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Gower lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last year Arthur, started to get near to the 80-year threshold with the lease on his first floor apartment in Gower. In buying his flat twenty years previously, the unexpired term was of no concern. Luckily, he became aware that he needed to take action soon on Extending the lease. Arthur arranged for a lease extension at the eleventh hour in August. Arthur and the landlord who owned the flat above ultimately agreed on a premium of £5,500 . If the lease had fallen below eighty years, the premium would have escalated by a minimum £1,075.
Dr Nathaniel Miller moved into a studio apartment in Gower in April 2003. We are asked if we could estimate the premium could be to prolong the lease by ninety years. Comparative residencies in Gower with a long lease were valued about £183,600. The mid-range amount of ground rent was £65 billed monthly. The lease elapsed in 2082. Taking into account 57 years outstanding we calculated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 not including costs.
Mr and Mrs. G Mitchell completed a basement flat in Gower in October 2005. The dilemma was if we could approximate the price would likely be for a 90 year lease extension. Comparative premises in Gower with an extended lease were worth £245,000. The mid-range amount of ground rent was £45 billed monthly. The lease expired on 16 September 2093. Given that there were 68 years remaining we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including legals.