Kidwelly leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Kidwelly residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Kidwelly you would be well advised to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Kidwelly with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth 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 estate charges justify it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower. |
The lawyers that we work with procure 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 John, came dangerously close to the eighty-year mark with the lease on his leasehold flat in Kidwelly. Having purchased his property two decades ago, the lease term was of no importance. Luckily, it dawned on him that he needed to take action soon on a lease extension. John was able to extend his lease at the eleventh hour last September. John and the freeholder via the managing agents subsequently settled on an amount of £5,000 . If the lease had slipped to less than 80 years, the sum would have become more costly by at least £1,125.
In 2012 we were approached by Mr Ethan Gray who, having bought a ground floor flat in Kidwelly in May 2004. We are asked if we could estimate the premium could be for a 90 year lease extension. Comparable properties in Kidwelly with an extended lease were valued around £256,600. The average amount of ground rent was £60 collected annually. The lease expired on 12 March 2074. Considering the 52 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £41,800 and £48,400 exclusive of legals.
Last Summer we were contacted by Dr Milo Smith , who took over the lease of a newly refurbished flat in Kidwelly in March 2003. We are asked if we could approximate the premium would likely be to prolong the lease by ninety years. Comparable homes in Kidwelly with 100 year plus lease were valued about £218,000. The mid-range ground rent payable was £45 billed annually. The lease lapsed in 2085. Taking into account 63 years remaining we calculated the premium to the freeholder for the lease extension to be between £17,100 and £19,800 plus costs.