Snowdonia leases on residential properties are gradually diminishing 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 Snowdonia tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Snowdonia you would be well advised to see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally accepted that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Lease extensions in Snowdonia can be a difficult process. We recommend you procure guidance from a conveyancer and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Snowdonia lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
George owned a 2 bedroom apartment in Snowdonia on the market with a lease of a little over 61 years remaining. George on an informal basis approached his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were George to invoke his statutory right. George obtained expert advice and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
Last Spring we were contacted by Mr A Lefèvre , who bought a one bedroom apartment in Snowdonia in November 2003. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar flats in Snowdonia with a long lease were valued about £275,000. The average amount of ground rent was £55 collected annually. The lease concluded in 2101. Taking into account 76 years outstanding we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus fees.
Ms Megan Morris was assigned a lease of a studio flat in Snowdonia in October 2000. The dilemma was if we could approximate the premium would likely be for a ninety year lease extension. Comparative residencies in Snowdonia with a long lease were worth £176,200. The average amount of ground rent was £65 billed yearly. The lease finished on 16 September 2081. Given that there were 56 years remaining we estimated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 exclusive of expenses.