On the balance of probabilities if you own a flat in Sketty you actually own a long leasehold interest over your property
Leasehold residencies in Sketty with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Sketty 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.
Off the back of protracted negotiations with the landlord of her two bedroom apartment in Sketty, Charlotte started the lease extension process as the eighty year mark was fast nearing. The transaction was concluded in July 2008. The landlord’s fees were negotiated to a tad over 700 GBP.
In 2011 we were e-mailed by Dr Ellie Clarke who, having purchased a newly refurbished apartment in Sketty in June 2009. We are asked if we could approximate the price would likely be to extend the lease by ninety years. Comparable residencies in Sketty with 100 year plus lease were valued around £280,000. The average amount of ground rent was £45 invoiced per annum. The lease ran out on 18 June 2095. Having 70 years left we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of costs.
Last Winter we were approach by Dr D Lefebvre , who acquired a one bedroom apartment in Sketty in November 2008. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Comparable flats in Sketty with a long lease were worth £223,400. The mid-range ground rent payable was £60 billed per annum. The lease lapsed on 13 November 2084. Considering the 59 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £27,600 and £31,800 not including expenses.