When it comes to residential leasehold premises in Tywyn, you are actually purchasing a right to reside in a property for a prescribed time frame. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should think about a lease extension sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately greater notably once there are less than 80 years left. Residents in Tywyn with a lease nearing 81 years remaining should seriously think of extending it without delay. Once the lease term has below eighty years outstanding, under the current statute the freeholder can calculate and charge a greater premium, based on a technical multiplication, known as “marriage value” which is due.
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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 be at least 75 years plus the term of the mortgage 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Tywyn,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Tywyn valuers.
Two years ago Harrison, started to get close to the eighty-year threshold with the lease on his leasehold apartment in Tywyn. In buying his flat two decades ago, the unexpired term was of little significance. by good luck, he recognised he needed to take steps soon on a lease extension. Harrison arranged for a lease extension just under the wire in January. Harrison and the landlord in the end settled on an amount of £5,000 . If the lease had fallen lower than 80 years, the price would have escalated by at least £900.
In 2013 we were contacted by Mr and Mrs. C Patel who, having completed a first floor flat in Tywyn in July 1995. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by 90 years. Comparable properties in Tywyn with a long lease were worth £166,800. The average ground rent payable was £50 collected annually. The lease lapsed on 25 September 2076. Having 50 years as a residual term we estimated the premium to the landlord to extend the lease to be between £32,300 and £37,400 plus costs.
In 2009 we were approached by Dr H Rose who, having moved into a ground floor flat in Tywyn in July 1999. The question was if we could approximate the premium would be to prolong the lease by a further 90 years. Similar properties in Tywyn with an extended lease were valued around £280,000. The mid-range ground rent payable was £45 billed annually. The lease terminated in 2096. Taking into account 70 years outstanding we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 plus fees.