With a domestic leasehold property in Harlech, you are in fact renting it for a certain period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive particularly when there are fewer than eighty years remaining. Anyone in Harlech with a lease approaching 81 years remaining should seriously think of extending it as soon as possible. When a lease has below eighty years outstanding, under the relevant Act the landlord is entitled to calculate and demand a larger amount, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold premises in Harlech with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant 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. |
| Birmingham Midshires | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 lawyers that we work with procure Harlech 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.
Trailing lengthy negotiations with the landlord of her first floor flat in Harlech, Victoria started the lease extension process as the 80 year threshold was swiftly nearing. The transaction was concluded in August 2005. The freeholder’s charges were negotiated to about 550 GBP.
In 2012 we were contacted by Mr and Mrs. I Davis who, having owned a newly refurbished flat in Harlech in April 2007. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by a further 90 years. Comparable properties in Harlech with a long lease were worth £200,000. The average ground rent payable was £50 collected quarterly. The lease concluded in 2102. Taking into account 77 years left we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 not including professional charges.
In 2009 we were called by Mr and Mrs. R Khan who, having completed a first floor flat in Harlech in October 2008. We are asked if we could approximate the price could be to extend the lease by an additional years. Identical residencies in Harlech with an extended lease were worth £265,200. The mid-range ground rent payable was £65 invoiced monthly. The lease came to a finish in 2091. Given that there were 66 years left we calculated the compensation to the freeholder for the lease extension to be within £15,200 and £17,600 exclusive of fees.