Gower leases on domestic deteriorating in value. Where your lease has in the region of ninety years remaining, you should start considering the need for a lease extension. If lease term is under eighty years, you will then have to pay 50% of the property's 'marriage value' in addition to the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Leasehold owners in Gower will mostly qualify for a lease extension; however a solicitor should be able check if you qualify. In some situations you may not be entitled. There are prescribed deadlines and steps to comply with once the process is triggered so it’s prudent to be guided by a conveyancer during the process.
Leasehold residencies in Gower with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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 conveyancer we work with provide it.
Eliot was the the leasehold owner of a conversion apartment in Gower on the market with a lease of a few days over 61 years unexpired. Eliot informally spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Eliot to exercise his statutory right. Eliot obtained expert advice and secured an acceptable deal informally and ending up with a market value flat.
Mr and Mrs. O Hill owned a studio flat in Gower in September 2002. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative properties in Gower with an extended lease were worth £200,800. The average ground rent payable was £65 collected annually. The lease concluded in 2086. Given that there were 60 years unexpired we approximated the premium to the landlord to extend the lease to be between £20,900 and £24,200 exclusive of expenses.
In 2014 we were e-mailed by Dr Tommy Allen who, having completed a studio apartment in Gower in January 2004. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable premises in Gower with 100 year plus lease were valued around £255,000. The average amount of ground rent was £50 collected yearly. The lease ended on 28 August 2097. Having 71 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus legals.