Machynlleth 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 becomes more expensive. It is the case that most Machynlleth tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Machynlleth you must investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Machynlleth with over 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you better control over the value of your Machynlleth leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted discussions with the freeholder of her leasehold flat in Machynlleth, Rebecca initiated the lease extension process just as the lease was nearing the all-important eighty-year threshold. The legal work was concluded in February 2005. The landlord’s costs were kept to an absolute minimum.
Last May we were approach by Dr C Moore , who was assigned a lease of a purpose-built flat in Machynlleth in August 2011. We are asked if we could shed any light on how much (approximately) premium would be for a 90 year lease extension. Comparative homes in Machynlleth with 100 year plus lease were valued around £280,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease ended in 2104. Considering the 78 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 plus expenses.
Mr and Mrs. I González acquired a basement apartment in Machynlleth in July 2006. The question was if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Identical homes in Machynlleth with an extended lease were in the region of £191,000. The mid-range ground rent payable was £65 billed monthly. The lease ran out in 2084. Taking into account 58 years outstanding we approximated the premium to the freeholder for the lease extension to be within £23,800 and £27,400 exclusive of legals.