Llanrumney leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Llanrumney tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Llanrumney you must investigate if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally accepted that a property with more than one hundred years remaining is worth approximately 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 |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Llanrumney 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.
Last October Mason, came dangerously near to the 80-year mark with the lease on his basement apartment in Llanrumney. Having bought his flat two decades ago, the lease term was of no importance. Luckily, he recognised he needed to take steps soon on Extending the lease. Mason extended the lease at the eleventh hour last June. Mason and the landlord eventually agreed on sum of £5,500 . If the lease had dropped to less than eighty years, the premium would have gone up by at least £875.
Ms Amy Martinez owned a one bedroom flat in Llanrumney in April 2003. The question was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable premises in Llanrumney with a long lease were in the region of £174,200. The mid-range amount of ground rent was £55 billed every twelve months. The lease lapsed on 19 August 2076. Taking into account 51 years remaining we calculated the premium to the landlord for the lease extension to be between £31,400 and £36,200 plus fees.
Last month we were e-mailed by Mr and Mrs. F Johnson , who purchased a ground floor flat in Llanrumney in February 1996. The question was if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Comparative residencies in Llanrumney with a long lease were worth £285,000. The mid-range ground rent payable was £45 invoiced annually. The lease ran out on 6 November 2096. Given that there were 71 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of professional charges.