Rhos On Sea leases on residential deteriorating in value. if your lease has about 90 years remaining, you should start considering the need for a lease extension. If lease term is under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Rhos On Sea will usually be legally entitled to a lease extension; however a solicitor will confirm if you qualify. In certain situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated so it’s sensible to be guided by a lawyer during the process.
Leasehold properties in Rhos On Sea with over one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
| 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. |
The conveyancers that we work with handle Rhos On Sea 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.
Nathan owned a high value flat in Rhos On Sea on the market with a lease of just over 61 years unexpired. Nathan on an informal basis spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Nathan to invoke his statutory right. Nathan procured expert legal guidance and secured satisfactory deal informally and ending up with a market value flat.
Last year we were approach by Mr and Mrs. M Phillips , who acquired a newly refurbished flat in Rhos On Sea in April 2000. We are asked if we could estimate the price would be to prolong the lease by 90 years. Similar premises in Rhos On Sea with a long lease were valued about £200,800. The mid-range ground rent payable was £65 collected yearly. The lease came to a finish on 6 September 2086. Considering the 60 years unexpired we estimated the premium to the landlord to extend the lease to be within £20,900 and £24,200 exclusive of legals.
In 2013 we were contacted by Dr Millie Collins who, having took over the lease of a basement apartment in Rhos On Sea in September 2003. The dilemma was if we could approximate the premium could be to prolong the lease by an additional years. Comparative residencies in Rhos On Sea with an extended lease were in the region of £255,000. The average ground rent payable was £50 collected per annum. The lease concluded in 2097. Given that there were 71 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including expenses.