It’s an underpublicised certainty that a Llandovery residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Llandovery property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining slips under 80 years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most leasehold owners in Llandovery will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with handle Llandovery 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 lawyer we work with provide it.
In the wake of eight months of unsuccessful negotiations with the freeholder of her ground floor apartment in Llandovery, Naomi initiated the lease extension process as the 80 year threshold was rapidly advancing. The legal work completed in June 2009. The landlord’s charges were kept to an absolute minimum.
Mr O Jones bought a first floor flat in Llandovery in April 2009. The dilemma was if we could estimate the price could be for a ninety year lease extension. Similar residencies in Llandovery with a long lease were worth £184,000. The mid-range ground rent payable was £55 billed quarterly. The lease finished in 2078. Considering the 53 years unexpired we estimated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of professional charges.
In 2012 we were approached by Dr Riley Norbert who, having bought a garden flat in Llandovery in April 2005. We are asked if we could approximate the premium would be to extend the lease by ninety years. Similar residencies in Llandovery with an extended lease were worth £290,000. The mid-range ground rent payable was £45 billed yearly. The lease terminated on 2 May 2098. Having 73 years outstanding we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including fees.