Gower leases on residential deteriorating in value. Where your lease has about 90 years left, you should start thinking about a lease extension. If lease term is under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Gower will mostly qualify for a lease extension; however a solicitor should be able confirm if you qualify. In some situations you may not qualify. There are also strict timetables and formalities to comply with once the process is triggered so it’s best to be guided by a conveyancer during the process.
Leasehold properties in Gower with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
The conveyancers that we work with procure Gower 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 conveyancing solicitor we work with provide it.
Rory was the the leasehold owner of a conversion flat in Gower being sold with a lease of fraction over 59 years left. Rory on an informal basis contacted his landlord a well known London-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 subject to an increased rent to £200 per annum. No ground rent would be due on a lease extension were Rory to exercise his statutory right. Rory procured expert advice and secured an acceptable deal informally and readily saleable.
Mr A André was assigned a lease of a purpose-built flat in Gower in May 2003. The question was if we could estimate the premium could be for a ninety year extension to my lease. Similar properties in Gower with 100 year plus lease were in the region of £246,800. The average amount of ground rent was £60 billed yearly. The lease terminated in 2075. Having 50 years left we approximated the premium to the freeholder for the lease extension to be within £44,700 and £51,600 not including expenses.
Mr and Mrs. V Stewart acquired a basement apartment in Gower in October 2001. The dilemma was if we could approximate the premium could be to extend the lease by a further 90 years. Identical homes in Gower with 100 year plus lease were in the region of £203,200. The average amount of ground rent was £65 collected annually. The lease ended in 2086. Considering the 61 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of expenses.