It’s an underpublicised certainty that a Welshpool residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Welshpool property market.Once your lease gets to 85ish years, you should start considering a lease extension. If lease term drops below 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Welshpool will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is generally accepted that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | 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. |
Engaging our service will provide you enhanced control over the value of your Welshpool leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Following lengthy negotiations with the landlord of her basement flat in Welshpool, Jade started the lease extension process as the 80 year deadline was quickly advancing. The lease extension completed in April 2011. The freeholder’s costs were kept to an absolute minimum.
Last April we were e-mailed by Mr and Mrs. C André , who moved into a garden flat in Welshpool in August 1996. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparative residencies in Welshpool with a long lease were valued around £218,400. The average amount of ground rent was £60 billed yearly. The lease lapsed in 2085. Taking into account 59 years unexpired we calculated the compensation to the landlord to extend the lease to be within £27,600 and £31,800 plus professional charges.
In 2011 we were phoned by Mr and Mrs. D Taylor who, having was assigned a lease of a one bedroom apartment in Welshpool in April 1997. We are asked if we could approximate the premium could be to extend the lease by ninety years. Comparable homes in Welshpool with an extended lease were worth £205,000. The average amount of ground rent was £50 billed quarterly. The lease concluded in 2105. Having 79 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.