Unfortunately that a Kidwelly residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Kidwelly property prices.Once your lease nears 85ish years, you should start thinking about 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 below eighty years - otherwise a higher amount will be payable. Most flat owners in Kidwelly will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
It is generally accepted that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle 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.
Gabriel owned a 2 bedroom flat in Kidwelly being sold with a lease of a few days over sixty years outstanding. Gabriel informally contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Gabriel to exercise his statutory right. Gabriel obtained expert legal guidance and was able to make an informed judgement and handle with the matter and sell the property.
In 2012 we were phoned by Dr Y Green who, having owned a first floor apartment in Kidwelly in June 1997. The question was if we could estimate the premium could be for a ninety year lease extension. Similar properties in Kidwelly with a long lease were in the region of £285,000. The average amount of ground rent was £55 collected yearly. The lease finished in 2105. Taking into account 79 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus expenses.
Dr Emma Mason owned a first floor flat in Kidwelly in April 1995. The dilemma was if we could approximate the premium could be to extend the lease by ninety years. Comparative homes in Kidwelly with 100 year plus lease were in the region of £193,400. The mid-range amount of ground rent was £65 invoiced annually. The lease ended in 2085. Taking into account 59 years unexpired we calculated the premium to the landlord to extend the lease to be between £21,900 and £25,200 not including costs.