With a long leasehold premises in Swansea East, you are actually buying an entitlement to reside in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are fewer than eighty years remaining. Leasehold owners in Swansea East with a lease approaching 81 years unexpired should seriously think of extending it as soon as possible. When a lease has less than 80 years remaining, under the relevant statute the freeholder is entitled to calculate and charge a greater premium, based on a technical calculation, known as “marriage value” which is payable.
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Using our service will provide you better 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 want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Michael owned a 2 bedroom flat in Swansea East on the market with a lease of a few days over 59 years unexpired. Michael informally approached his landlord being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £50 per annum. No ground rent would be payable on a lease extension were Michael to invoke his statutory right. Michael procured expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
In 2011 we were approached by Dr Connor Ramírez who, having completed a garden flat in Swansea East in October 2005. We are asked if we could shed any light on how much (roughly) premium could be for a ninety year extension to my lease. Similar residencies in Swansea East with an extended lease were valued around £225,800. The mid-range amount of ground rent was £60 invoiced annually. The lease ran out in 2086. Considering the 60 years left we approximated the compensation to the landlord for the lease extension to be between £25,700 and £29,600 not including professional charges.
Last Autumn we were e-mailed by Dr M Brooks , who acquired a first floor flat in Swansea East in June 2006. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparative flats in Swansea East with 100 year plus lease were worth £210,000. The average ground rent payable was £50 invoiced monthly. The lease concluded in 2106. Given that there were 80 years remaining we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus professional charges.