Mynydd Isa leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Mynydd Isa tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Mynydd Isa you must see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold properties in Mynydd Isa with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Mynydd Isa 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.
Half a year ago Oliver, started to get near to the eighty-year mark with the lease on his one bedroom apartment in Mynydd Isa. Having bought his flat 19 years previously, the length of the lease was of no importance. As luck would have it, it dawned on him that he would imminently be paying an inflated amount for a lease extension. Oliver arranged for a lease extension just under the wire last May. Oliver and the freeholder via the managing agents in the end agreed on a premium of £5,500 . If he had missed the deadline, the figure would have increased by at least £850.
Last month we were phoned by Mr and Mrs. C Wood , who completed a recently refurbished flat in Mynydd Isa in October 2007. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Similar flats in Mynydd Isa with a long lease were valued about £193,400. The average ground rent payable was £65 invoiced annually. The lease came to a finish on 15 August 2084. Given that there were 59 years left we calculated the premium to the freeholder to extend the lease to be between £21,900 and £25,200 not including expenses.
Mr and Mrs. T Bennett moved into a one bedroom flat in Mynydd Isa in March 2006. We are asked if we could approximate the premium could be to prolong the lease by 90 years. Comparable properties in Mynydd Isa with a long lease were worth £255,000. The mid-range amount of ground rent was £50 billed quarterly. The lease elapsed in 2095. Having 70 years remaining we calculated the premium to the landlord to extend the lease to be within £10,500 and £12,000 exclusive of costs.