With a long leasehold premises in Neath, you effectively rent it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately greater notably when there are fewer than 80 years left. Leasehold owners in Neath with a lease nearing 81 years remaining should seriously consider extending it sooner rather than later. When the lease term has below 80 years outstanding, under the current statute the landlord can calculate and charge a greater amount, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years left, 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. |
| 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; |
| 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. |
| Halifax | 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. |
The conveyancers that we work with procure Neath 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 conveyancer we work with provide it.
Sebastian was the the leasehold owner of a high value flat in Neath being marketed with a lease of a little over 61 years unexpired. Sebastian on an informal basis approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 per annum. No ground rent would be due on a lease extension were Sebastian to exercise his statutory right. Sebastian procured expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
Last month we were contacted by Mr and Mrs. R Anderson , who completed a purpose-built flat in Neath in November 2001. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Comparative premises in Neath with a long lease were valued about £183,600. The average amount of ground rent was £65 billed every twelve months. The lease concluded on 14 August 2082. Having 57 years as a residual term we calculated the premium to the landlord for the lease extension to be between £28,500 and £33,000 plus expenses.
Last Autumn we were approach by Mr Blake Turner , who moved into a first floor flat in Neath in November 1995. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Similar properties in Neath with a long lease were worth £245,000. The average amount of ground rent was £45 collected every twelve months. The lease came to a finish on 5 November 2093. Considering the 68 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus legals.