Swansea East leases on residential properties are gradually decreasing 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 under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Swansea East you would be well advised to check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the property will be equivalent in value to 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you increased control over the value of your Swansea East leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted correspondence with the landlord of her studio apartment in Swansea East, Laura commenced the lease extension process as the 80 year threshold was rapidly advancing. The lease extension was concluded in August 2014. The landlord’s costs were restricted to a tad over 700 GBP.
Last Autumn we were approach by Dr Megan Adams , who bought a one bedroom apartment in Swansea East in June 2012. We are asked if we could estimate the premium would likely be to extend the lease by a further 90 years. Similar premises in Swansea East with a long lease were worth £181,600. The average amount of ground rent was £55 collected monthly. The lease expired in 2077. Taking into account 52 years outstanding we approximated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of fees.
Mrs L Jones took over the lease of a ground floor apartment in Swansea East in October 1999. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Identical homes in Swansea East with a long lease were valued around £290,000. The average amount of ground rent was £45 invoiced every twelve months. The lease expiry date was in 2098. Having 73 years unexpired we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of costs.