With a domestic leasehold premises in Welshpool, you effectively rent it for a certain period of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive particularly once there are fewer than 80 years remaining. Leasehold owners in Welshpool with a lease approaching 81 years remaining should seriously consider extending it without delay. When a lease has fewer than 80 years left, under the relevant Act the freeholder is entitled to calculate and demand a larger amount, based on a technical multiplication, known as “marriage value” which is due.
It is generally accepted that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 Welshpool,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Welshpool valuers.
In 2014 Tommy, started to get close to the 80-year threshold with the lease on his two bedroom apartment in Welshpool. In buying his property 18 years ago, the lease term was of minimal importance. As luck would have it, he noticed he would soon be paying an inflated amount for a lease extension. Tommy extended the lease just ahead of time in August. Tommy and the freeholder ultimately settled on the final figure of £5,000 . If the lease had dipped below 80 years, the premium would have become more costly by a minimum £1,150.
In 2011 we were approached by Mrs Gemma Lee who, having owned a ground floor apartment in Welshpool in July 2008. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Comparative premises in Welshpool with a long lease were worth £300,000. The mid-range ground rent payable was £50 billed per annum. The lease concluded on 15 February 2102. Given that there were 76 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of fees.
In 2010 we were approached by Mr U Stewart who, having purchased a one bedroom flat in Welshpool in July 2007. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by 90 years. Similar flats in Welshpool with a long lease were valued about £257,800. The average amount of ground rent was £65 collected monthly. The lease came to a finish on 6 March 2091. Given that there were 65 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £18,100 and £20,800 exclusive of legals.