It’s an underpublicised certainty that a Blackwood residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Blackwood property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term drops under eighty years, you will then be required to pay 50% 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 leasehold owners in Blackwood will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold properties in Blackwood with in excess of one hundred years outstanding on the lease are often regarded as a ‘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 buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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 |
The lawyers that we work with undertake Blackwood 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 conveyancing solicitor we work with provide it.
Hunter was the the leasehold proprietor of a high value flat in Blackwood being marketed with a lease of a little over 59 years remaining. Hunter informally approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Hunter to exercise his statutory right. Hunter procured expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
Last Christmas we were phoned by Mr I Mitchell , who took over the lease of a one bedroom flat in Blackwood in February 2011. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Similar properties in Blackwood with 100 year plus lease were valued about £267,600. The average ground rent payable was £65 invoiced per annum. The lease terminated in 2092. Taking into account 67 years outstanding we estimated the compensation to the landlord to extend the lease to be within £14,300 and £16,400 exclusive of costs.
In 2009 we were approached by Dr Daisy Lambert who, having acquired a purpose-built flat in Blackwood in June 2008. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar flats in Blackwood with an extended lease were worth £206,200. The mid-range ground rent payable was £55 billed yearly. The lease expired on 12 April 2081. Given that there were 56 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 not including fees.