Unfortunately that a Holyhead residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Holyhead property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining dips below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Holyhead will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Holyhead 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.
Off the back of protracted discussions with the freeholder of her one bedroom apartment in Holyhead, Olivia started the lease extension process just as her lease was nearing the critical 80-year mark. The legal work was concluded in July 2005. The freeholder’s costs were kept to an absolute minimum.
In 2009 we were phoned by Mr and Mrs. O Jones who, having bought a basement flat in Holyhead in March 2012. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Similar premises in Holyhead with a long lease were worth £216,000. The mid-range ground rent payable was £60 collected every twelve months. The lease finished on 16 May 2083. Taking into account 58 years outstanding we approximated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 plus legals.
Last March we were called by Mr K Lambert , who took over the lease of a first floor flat in Holyhead in July 2009. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar properties in Holyhead with an extended lease were worth £200,000. The average amount of ground rent was £50 invoiced quarterly. The lease ended on 19 February 2103. Having 78 years unexpired we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including fees.