Magor 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 the lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Magor residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Magor you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the residence 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a landlord in Magor,the lease extension solicitors 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 Magor valuers.
16 months ago Leon, started to get close to the 80-year mark with the lease on his ground floor apartment in Magor. In buying his flat 19 years ago, the lease term was of no relevance. As luck would have it, he realised he needed to take steps soon on Extending the lease. Leon was able to extend his lease at the eleventh hour in April. Leon and the freeholder via the management company in the end settled on sum of £5,500 . If the lease had descended below 80 years, the figure would have become more costly by at least £1,125.
In 2010 we were contacted by Dr Andrew André who, having took over the lease of a garden flat in Magor in February 2007. The dilemma was if we could approximate the premium would be to extend the lease by ninety years. Identical flats in Magor with 100 year plus lease were valued about £200,800. The mid-range amount of ground rent was £65 invoiced monthly. The lease terminated on 4 March 2085. Considering the 60 years outstanding we calculated the premium to the freeholder for the lease extension to be within £20,900 and £24,200 plus professional charges.
Mrs N Reed took over the lease of a studio flat in Magor in August 2001. The question was if we could estimate the premium would likely be for a ninety year lease extension. Comparable properties in Magor with a long lease were valued about £260,000. The average amount of ground rent was £50 invoiced every twelve months. The lease expired on 21 July 2096. Given that there were 71 years outstanding we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of expenses.