Machynlleth leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Machynlleth tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Machynlleth you would be well advised to see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Lease extensions in Machynlleth can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Machynlleth lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Tyler owned a 2 bedroom apartment in Machynlleth on the market with a lease of a few days over 59 years unexpired. Tyler on an informal basis contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Tyler to exercise his statutory right. Tyler procured expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Mr and Mrs. Y Thompson was assigned a lease of a one bedroom flat in Machynlleth in April 2008. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Similar premises in Machynlleth with a long lease were in the region of £261,600. The mid-range amount of ground rent was £60 collected annually. The lease ran out on 9 April 2077. Considering the 52 years left we approximated the compensation to the landlord to extend the lease to be within £39,000 and £45,000 exclusive of legals.
Mr and Mrs. D Thomas was assigned a lease of a first floor apartment in Machynlleth in June 2000. The dilemma was if we could estimate the price would likely be for a ninety year extension to my lease. Comparable homes in Machynlleth with an extended lease were valued around £218,000. The average ground rent payable was £45 invoiced yearly. The lease ran out in 2088. Considering the 63 years outstanding we calculated the compensation to the landlord to extend the lease to be within £17,100 and £19,800 exclusive of professional charges.