It’s a harsh truth that a Kidwelly residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Kidwelly property market.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher amount will be due. The majority of leasehold owners in Kidwelly will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
The conveyancing solicitors that we work with undertake Kidwelly 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.
Two years ago Max, came precariously close to the 80-year threshold with the lease on his garden flat in Kidwelly. In buying his home two decades ago, the lease term was of minimal interest. Fortunately, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Max arranged for a lease extension just under the wire in March. Max and the freeholder ultimately agreed on the final figure of £5,000 . If the lease had slipped below eighty years, the premium would have become more costly by a minimum £925.
In 2012 we were approached by Mr and Mrs. O Mercier who, having completed a purpose-built apartment in Kidwelly in February 2012. The question was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Identical homes in Kidwelly with an extended lease were worth £200,800. The average ground rent payable was £65 billed quarterly. The lease expired in 2086. Having 60 years outstanding we calculated the compensation to the landlord for the lease extension to be within £20,900 and £24,200 exclusive of costs.
Last Christmas we were e-mailed by Dr Oliver Green , who was assigned a lease of a purpose-built apartment in Kidwelly in March 2011. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative properties in Kidwelly with a long lease were worth £255,000. The mid-range ground rent payable was £50 invoiced annually. The lease ran out in 2097. Taking into account 71 years remaining we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.