Llandovery leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Llandovery residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Llandovery you should investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 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 |
|---|---|
| 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. |
| 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. |
| 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 |
| 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. |
Using our service gives you better control over the value of your Llandovery leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Oscar, came dangerously near to the eighty-year mark with the lease on his garden flat in Llandovery. Having bought his flat two decades ago, the unexpired term was of little relevance. Thankfully, he noticed he would imminently be paying an escalated premium for Extending the lease. Oscar was able to extend his lease just in the nick of time last July. Oscar and the landlord who owned the flat above eventually settled on an amount of £5,000 . If he had missed the deadline, the sum would have gone up by a minimum £850.
In 2014 we were phoned by Ms Kayleigh Nelson who, having purchased a one bedroom apartment in Llandovery in November 2006. The question was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Comparative flats in Llandovery with a long lease were worth £280,000. The mid-range ground rent payable was £45 billed yearly. The lease concluded on 13 August 2096. Considering the 70 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus expenses.
Last Summer we were e-mailed by Dr U Cook , who bought a basement flat in Llandovery in May 1997. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar residencies in Llandovery with an extended lease were in the region of £218,400. The average ground rent payable was £60 billed every twelve months. The lease finished on 20 May 2085. Considering the 59 years remaining we approximated the premium to the landlord for the lease extension to be within £27,600 and £31,800 not including legals.