Welshpool leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Welshpool tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Welshpool you really ought to check if your lease has between 70 and ninety years remaining. There are good reasons why a Welshpool leaseholder with a lease having around eighty years unexpired should take action to ensure that a lease extension is actioned without delay
Leasehold properties in Welshpool with more than one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with handle Welshpool lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Matthew owned a studio flat in Welshpool on the market with a lease of just over 72 years outstanding. Matthew informally contacted his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £125 annually. No ground rent would be payable on a lease extension were Matthew to invoke his statutory right. Matthew obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
Mr and Mrs. W Bernard completed a newly refurbished flat in Welshpool in September 2003. We are asked if we could estimate the price would be for a ninety year lease extension. Similar homes in Welshpool with an extended lease were valued about £285,000. The average ground rent payable was £45 collected annually. The lease ran out on 6 June 2097. Taking into account 71 years left we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of fees.
Dr A Girard bought a studio apartment in Welshpool in June 1995. We are asked if we could approximate the price would be to prolong the lease by ninety years. Comparative residencies in Welshpool with a long lease were worth £225,800. The mid-range amount of ground rent was £60 invoiced per annum. The lease concluded on 21 August 2086. Taking into account 60 years unexpired we calculated the premium to the landlord to extend the lease to be within £23,800 and £27,400 plus professional charges.