With a residential leasehold premises in Nefyn, you effectively rent it for a certain period of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent 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 becomes disproportionately greater particularly once there are less than 80 years remaining. Anyone in Nefyn with a lease drawing near to 81 years unexpired should seriously think of extending it sooner as opposed to later. When a lease has fewer than 80 years left, under the current legislation the landlord is entitled to calculate and demand a greater amount, assessed on a technical computation, known as “marriage value” which is payable.
Leasehold residencies in Nefyn with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 procure Nefyn 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.
After protracted discussions with the landlord of her basement apartment in Nefyn, Abigail started the lease extension process as the 80 year threshold was rapidly coming. The transaction was finalised in February 2009. The landlord’s charges were kept to an absolute minimum.
In 2012 we were phoned by Mr and Mrs. E Ricardo who, having completed a garden apartment in Nefyn in March 2008. The dilemma was if we could approximate the premium could be to extend the lease by 90 years. Identical flats in Nefyn with an extended lease were in the region of £290,000. The mid-range ground rent payable was £60 billed monthly. The lease finished in 2106. Given that there were 80 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of expenses.
Last Spring we were approach by Ms Jennifer Phillips , who bought a garden flat in Nefyn in May 2007. The question was if we could estimate the premium could be to extend the lease by 90 years. Comparative homes in Nefyn with 100 year plus lease were valued about £200,800. The mid-range amount of ground rent was £65 billed yearly. The lease ended in 2086. Taking into account 60 years left we estimated the compensation to the landlord to extend the lease to be within £20,900 and £24,200 exclusive of fees.