It’s an underpublicised certainty that a Morriston residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Morriston property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term falls under eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Morriston 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 timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold properties in Morriston with in excess of one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Retaining our service gives you increased control over the value of your Morriston leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Alfie, came precariously close to the 80-year threshold with the lease on his purpose- built flat in Morriston. Having purchased his flat twenty years ago, the lease term was of no interest. Fortunately, he noticed he needed to take action soon on Extending the lease. Alfie was able to extend his lease just under the wire in April. Alfie and the landlord who owned the flat above in the end agreed on the final figure of £5,500 . If he not met the deadline, the sum would have become more exhorbitant by a minimum £975.
In 2010 we were phoned by Dr Sebastian Baker who, having bought a studio flat in Morriston in April 2011. The question was if we could approximate the price could be for a ninety year lease extension. Identical properties in Morriston with a long lease were valued around £193,400. The average ground rent payable was £65 collected annually. The lease terminated in 2084. Having 59 years left we approximated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 exclusive of fees.
In 2012 we were approached by Dr I Morgan who, having purchased a one bedroom flat in Morriston in August 2006. The question was if we could estimate the premium could be to extend the lease by an additional years. Similar residencies in Morriston with a long lease were valued around £255,000. The average ground rent payable was £50 invoiced annually. The lease concluded in 2095. Given that there were 70 years left we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus costs.