Unfortunately that a Killay residential lease is a deteriorating 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 loss of value being disguised by increases in the Killay property prices.Once your lease nears 85ish years, you need to 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 dips below 80 years - otherwise a higher premium will be payable. Most flat owners in Killay will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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. |
Lease extensions in Killay can be a difficult process. We recommend you obtain guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Killay lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Leon, came dangerously close to the eighty-year mark with the lease on his purpose- built apartment in Killay. Having bought his home 18 years ago, the unexpired term was of minimal concern. Thankfully, he recognised he would imminently be paying way over the odds for a lease extension. Leon extended the lease just under the wire in July. Leon and the landlord in the end agreed on the final figure of £5,000 . If the lease had fallen below eighty years, the premium would have become more exhorbitant by a minimum £1,100.
In 2009 we were contacted by Ms Kirsty Lee who, having bought a purpose-built flat in Killay in April 2007. We are asked if we could shed any light on how much (roughly) price could be to prolong the lease by a further 90 years. Identical homes in Killay with 100 year plus lease were valued around £280,000. The average ground rent payable was £45 billed every twelve months. The lease ended in 2096. Taking into account 70 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 not including expenses.
Last Summer we were called by Mr and Mrs. P Edwards , who completed a first floor flat in Killay in March 2004. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by a further 90 years. Similar homes in Killay with an extended lease were in the region of £218,400. The average ground rent payable was £60 collected annually. The lease terminated in 2085. Given that there were 59 years remaining we approximated the compensation to the freeholder for the lease extension to be within £27,600 and £31,800 plus expenses.