When it comes to residential leasehold premises in Swansea City, you effectively rent it for a certain amount of time. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive notably when there are less than 80 years remaining. Anyone in Swansea City with a lease nearing 81 years remaining should seriously think of extending it without delay. When the lease term has below eighty years left, under the relevant statute the freeholder can calculate and levy a larger premium, assessed on a technical computation, strangely termed as “marriage value” which is payable.
It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
| 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 procure Swansea City 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.
Harry was the the leasehold proprietor of a high value flat in Swansea City being marketed with a lease of fraction over 59 years remaining. Harry on an informal basis approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Harry to exercise his statutory right. Harry procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
In 2012 we were e-mailed by Mr and Mrs. N Hill who, having purchased a one bedroom apartment in Swansea City in October 1996. The dilemma was if we could approximate the price would be to prolong the lease by 90 years. Similar premises in Swansea City with a long lease were in the region of £280,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease lapsed on 16 January 2095. Taking into account 70 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of expenses.
Dr Benjamin Wood moved into a newly refurbished apartment in Swansea City in June 2012. We are asked if we could estimate the price would likely be to prolong the lease by an additional years. Comparable flats in Swansea City with a long lease were worth £218,400. The mid-range ground rent payable was £60 billed yearly. The lease ended on 3 June 2084. Having 59 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £27,600 and £31,800 exclusive of fees.