It’s an underpublicised truth that a Swansea East residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Swansea East property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Swansea East will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally considered that a property 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 residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
The lawyers that we work with handle Swansea East 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.
Last year Harrison, started to get close to the 80-year mark with the lease on his basement apartment in Swansea East. Having bought his flat two decades ago, the length of the lease was of little bearing. Luckily, he became aware that he would imminently be paying an inflated amount for a lease extension. Harrison extended the lease just under the wire in September. Harrison and the landlord eventually agreed on an amount of £6,000 . If the lease had slipped below 80 years, the premium would have escalated by a minimum £1,000.
Last Summer we were e-mailed by Mr and Mrs. L Petit , who completed a recently refurbished apartment in Swansea East in June 2004. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar flats in Swansea East with an extended lease were valued around £235,600. The mid-range ground rent payable was £60 collected yearly. The lease terminated in 2088. Having 62 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 exclusive of fees.
Mrs Mia Harris completed a first floor apartment in Swansea East in July 1998. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparative properties in Swansea East with 100 year plus lease were valued about £174,200. The average amount of ground rent was £55 invoiced yearly. The lease terminated on 12 January 2077. Considering the 51 years remaining we approximated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of costs.