The value of Mumbles leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the unexpired lease term is less than 80 years
Leasehold residencies in Mumbles with over 100 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 premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 Mumbles,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Mumbles valuers.
Andrew owned a 2 bedroom flat in Mumbles being marketed with a lease of fraction over fifty eight years remaining. Andrew on an informal basis contacted his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Andrew to exercise his statutory right. Andrew procured expert advice and secured satisfactory deal without resorting to tribunal and sell the property.
Last Summer we were phoned by Mr Muhammad James , who was assigned a lease of a recently refurbished apartment in Mumbles in November 2009. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by an additional years. Similar homes in Mumbles with a long lease were valued around £245,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease expired on 13 September 2093. Given that there were 68 years remaining we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus professional charges.
In 2009 we were approached by Mrs T Harris who, having owned a one bedroom apartment in Mumbles in November 2010. We are asked if we could estimate the price could be to prolong the lease by ninety years. Comparative homes in Mumbles with a long lease were valued around £285,000. The mid-range ground rent payable was £55 billed annually. The lease finished in 2104. Given that there were 79 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including expenses.