Swansea East 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 Swansea East tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Swansea East you would be well advised to see if your lease has between seventy and 90 years left. There are good reasons why a Swansea East leaseholder with a lease having around 80 years remaining should take steps to make sure that a lease extension is put in place without delay
Leasehold residencies in Swansea East with more than 100 years remaining on the lease are sometimes referred to as ‘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 buying the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Swansea East leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Aiden owned a studio flat in Swansea East being sold with a lease of a few days over sixty years unexpired. Aiden informally approached his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Aiden to exercise his statutory right. Aiden procured expert legal guidance and was able to make an informed decision and handle with the matter and sell the flat.
Last Spring we were e-mailed by Mr and Mrs. E Collins , who acquired a one bedroom flat in Swansea East in September 1996. The question was if we could approximate the premium would likely be for a ninety year lease extension. Comparative properties in Swansea East with a long lease were worth £200,000. The average amount of ground rent was £50 billed quarterly. The lease ended on 18 July 2102. Taking into account 77 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus fees.
Last Christmas we were contacted by Dr James Adams , who was assigned a lease of a one bedroom apartment in Swansea East in May 1995. We are asked if we could approximate the price could be for a ninety year lease extension. Identical homes in Swansea East with an extended lease were valued about £260,200. The mid-range ground rent payable was £65 collected quarterly. The lease finished on 24 April 2091. Considering the 66 years unexpired we estimated the compensation to the landlord for the lease extension to be within £16,200 and £18,600 exclusive of fees.