It’s an underpublicised certainty that a Machynlleth residential lease is a wasting 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 reduction being disguised by increases in the Machynlleth property market.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining dips below eighty years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Machynlleth will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the process.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Machynlleth,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Machynlleth valuers.
Liam was the the leasehold proprietor of a conversion apartment in Machynlleth on the market with a lease of a little over 59 years left. Liam on an informal basis spoke with his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be due on a lease extension were Liam to exercise his statutory right. Liam obtained expert legal guidance and was able to make a more informed decision and handle with the matter and sell the flat.
Dr I Robinson moved into a recently refurbished apartment in Machynlleth in August 1997. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Identical residencies in Machynlleth with a long lease were in the region of £255,000. The mid-range amount of ground rent was £50 collected per annum. The lease expired in 2097. Having 71 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.
In 2009 we were phoned by Mr and Mrs. M Mitchell who, having completed a one bedroom flat in Machynlleth in July 2002. We are asked if we could approximate the price would likely be to extend the lease by 90 years. Identical properties in Machynlleth with a long lease were worth £254,200. The average ground rent payable was £60 collected annually. The lease concluded on 27 August 2077. Given that there were 51 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £43,700 and £50,600 exclusive of fees.