Mid Wales leases on domestic properties are gradually losing value. if your lease has in the region of ninety years unexpired, you should start thinking about a lease extension. If lease term is less than 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Mid Wales will mostly qualify for a lease extension; however a solicitor should be able confirm if you qualify. In certain situations you may not qualify. There are also strict timetables and formalities to comply with once the process has started so it’s sensible to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake 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 conveyancing solicitor we work with provide it.
Last year Alex, came very near to the eighty-year threshold with the lease on his one bedroom flat in Mid Wales. Having bought his flat twenty years previously, the lease term was of minimal significance. As luck would have it, he recognised he needed to take steps soon on a lease extension. Alex extended the lease just under the wire last May. Alex and the freeholder via the managing agents eventually settled on an amount of £6,000 . If he had missed the deadline, the premium would have become more exhorbitant by at least £1,125.
Last Summer we were approach by Mrs Hollie Clark , who bought a basement apartment in Mid Wales in September 1997. We are asked if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Identical homes in Mid Wales with an extended lease were valued around £280,000. The average amount of ground rent was £45 billed annually. The lease came to a finish on 5 September 2096. Given that there were 70 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including professional charges.
Dr Lucy Roux owned a purpose-built apartment in Mid Wales in January 1999. We are asked if we could estimate the premium would be for a 90 year lease extension. Comparative residencies in Mid Wales with an extended lease were in the region of £223,400. The average amount of ground rent was £60 billed yearly. The lease lapsed in 2085. Considering the 59 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £27,600 and £31,800 plus legals.