As the length of the unexpired term of a Mid Wales domestic lease decreases so does its value and therefore the value of your property. If the lease has, in excess of one hundred years remaining then this decrease may be fractional that being said there will become a point in time when a lease has under than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary rational as to why you should consider extending without delay. Many flat owners in Mid Wales will qualify for this right; nevertheless a lawyer will be able to confirm if you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally accepted that a property with in excess of 100 years remaining is worth approximately the equivalent 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. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Mid Wales 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 lawyer we work with provide it.
Twenty four months ago Leon, started to get close to the eighty-year threshold with the lease on his leasehold flat in Mid Wales. Having bought his property 19 years ago, the length of the lease was of minimal concern. Thankfully, he realised he needed to take action soon on a lease extension. Leon arranged for a lease extension just under the wire last June. Leon and the landlord who owned the flat above ultimately agreed on a premium of £6,000 . If he not met the deadline, the amount would have gone up by a minimum £1,000.
Last Autumn we were e-mailed by Ms D Brooks , who was assigned a lease of a newly refurbished flat in Mid Wales in November 2006. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by ninety years. Similar residencies in Mid Wales with 100 year plus lease were worth £233,200. The average ground rent payable was £60 billed yearly. The lease expiry date was in 2086. Given that there were 61 years left we estimated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 exclusive of expenses.
Last Autumn we were contacted by Dr H Fournier , who took over the lease of a garden flat in Mid Wales in October 2000. We are asked if we could estimate the premium would likely be to prolong the lease by an additional years. Comparative homes in Mid Wales with a long lease were worth £171,800. The mid-range amount of ground rent was £55 billed yearly. The lease expiry date was in 2075. Given that there were 50 years remaining we approximated the premium to the landlord to extend the lease to be between £33,300 and £38,400 plus professional charges.