Tenby leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Tenby residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Tenby you really ought to investigate if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Tenby with more than 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Retaining our service gives you better control over the value of your Tenby leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Lucas was the the leasehold proprietor of a conversion flat in Tenby on the market with a lease of just over 61 years unexpired. Lucas on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 yearly. No ground rent would be due on a lease extension were Lucas to exercise his statutory right. Lucas obtained expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
Mrs J Roberts completed a basement flat in Tenby in September 2005. The dilemma was if we could approximate the price would be for a 90 year extension to my lease. Comparable residencies in Tenby with a long lease were in the region of £265,000. The average amount of ground rent was £55 collected every twelve months. The lease came to a finish in 2099. Considering the 74 years unexpired we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of costs.
In 2014 we were e-mailed by Mr James Howard who, having completed a one bedroom apartment in Tenby in November 2006. The question was if we could approximate the premium would be for a ninety year extension to my lease. Comparative flats in Tenby with 100 year plus lease were in the region of £166,400. The average ground rent payable was £60 billed per annum. The lease terminated in 2079. Taking into account 54 years as a residual term we calculated the premium to the landlord to extend the lease to be between £32,300 and £37,400 not including legals.