Unfortunately that a Mid Wales residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Mid Wales property market.Where your lease has approximately ninety years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below eighty years - otherwise a higher premium will be payable. Most leasehold owners in Mid Wales will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the process.
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Mid Wales leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted correspondence with the freeholder of her one bedroom apartment in Mid Wales, Madeleine started the lease extension process as the eighty year deadline was quickly approaching. The lease extension was finalised in April 2007. The landlord’s fees were restricted to slightly above 600 GBP.
Mrs O Davis bought a one bedroom apartment in Mid Wales in June 2004. We are asked if we could approximate the price would likely be to extend the lease by an additional years. Comparative flats in Mid Wales with an extended lease were valued around £216,000. The mid-range amount of ground rent was £60 billed yearly. The lease finished on 21 February 2084. Considering the 58 years unexpired we estimated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 not including expenses.
Mr and Mrs. S Fournier moved into a studio flat in Mid Wales in April 2001. The dilemma was if we could shed any light on how much (approximately) price would be to prolong the lease by 90 years. Comparable residencies in Mid Wales with 100 year plus lease were worth £205,000. The average amount of ground rent was £50 billed quarterly. The lease came to a finish on 6 February 2104. Taking into account 78 years outstanding we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including professional charges.