Unfortunately that a Towyn residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Towyn property market.Once your lease nears 85ish years, you need to start considering 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 dips below 80 years - otherwise a higher premium will be payable. The majority of flat owners in Towyn will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Lease extensions in Towyn can be a difficult process. We recommend you get guidance from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Towyn lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Jayden, started to get near to the 80-year mark with the lease on his two bedroom apartment in Towyn. In buying his home 19 years ago, the length of the lease was of minimal concern. by good luck, it dawned on him that he would soon be paying an inflated amount for a lease extension. Jayden was able to extend his lease just under the wire last August. Jayden and the landlord who owned the flat above eventually agreed on an amount of £5,000 . If the lease had gone to less than eighty years, the price would have become more costly by at least £925.
In 2014 we were called by Ms Poppy Lambert who, having acquired a ground floor apartment in Towyn in June 2005. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Comparable properties in Towyn with 100 year plus lease were in the region of £200,800. The average ground rent payable was £65 invoiced every twelve months. The lease concluded in 2085. Having 60 years as a residual term we estimated the premium to the landlord to extend the lease to be within £20,900 and £24,200 exclusive of expenses.
In 2014 we were called by Mr and Mrs. G King who, having was assigned a lease of a garden apartment in Towyn in November 1996. We are asked if we could shed any light on how much (approximately) price would likely be to prolong the lease by 90 years. Comparative flats in Towyn with a long lease were valued around £255,000. The average ground rent payable was £50 collected per annum. The lease terminated in 2096. Given that there were 71 years remaining we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.