When it comes to long leasehold premises in Deeside, you effectively rent it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are fewer than eighty years remaining. Anyone in Deeside with a lease drawing near to 81 years remaining should seriously think of extending it as soon as possible. When a lease has under eighty years outstanding, under the relevant Act the freeholder is entitled to calculate and demand a greater premium, based on a technical computation, known as “marriage value” which is due.
It is conventional wisdom that a property with over 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Deeside 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 lawyer we work with provide it.
Henry owned a 2 bedroom flat in Deeside on the market with a lease of a little over 61 years left. Henry informally approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Henry to invoke his statutory right. Henry obtained expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
In 2010 we were called by Mr I Martinez who, having was assigned a lease of a first floor flat in Deeside in March 2010. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Identical flats in Deeside with 100 year plus lease were in the region of £208,600. The average amount of ground rent was £60 billed annually. The lease termination date was in 2083. Having 57 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £30,400 and £35,200 not including expenses.
Dr P Wood took over the lease of a ground floor flat in Deeside in August 2004. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative homes in Deeside with a long lease were in the region of £200,000. The mid-range ground rent payable was £50 collected annually. The lease concluded on 11 April 2103. Taking into account 77 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 not including legals.