With a domestic leasehold premises in Wells, you are actually purchasing a right to reside in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive notably when there are less than 80 years remaining. Leasehold owners in Wells with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. Once the lease term has under 80 years left, under the current statute the freeholder is entitled to calculate and levy a greater amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is generally accepted that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date 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. |
Engaging our service gives you enhanced control over the value of your Wells leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Jude, came very near to the 80-year threshold with the lease on his basement apartment in Wells. In buying his home 18 years previously, the length of the lease was of little bearing. Luckily, he became aware that he needed to take action soon on Extending the lease. Jude arranged for a lease extension just under the wire in April. Jude and the freeholder via the management company ultimately agreed on a premium of £5,000 . If the lease had fallen below eighty years, the price would have become more costly by at least £1,050.
Mr R Peterson took over the lease of a garden flat in Wells in September 1995. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year lease extension. Similar residencies in Wells with a long lease were worth £168,800. The mid-range ground rent payable was £60 collected quarterly. The lease ended on 10 July 2080. Taking into account 55 years as a residual term we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 plus expenses.
Mr and Mrs. B Clarke completed a first floor apartment in Wells in March 2008. We are asked if we could estimate the premium would be to extend the lease by a further 90 years. Similar homes in Wells with a long lease were worth £235,200. The mid-range ground rent payable was £45 billed quarterly. The lease elapsed on 28 June 2091. Having 66 years as a residual term we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including expenses.