Deeside leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Deeside tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Deeside you must see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold residencies in Deeside with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Deeside leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of protracted correspondence with the freeholder of her garden apartment in Deeside, Freya commenced the lease extension process as the 80 year threshold was swiftly coming. The legal work was finalised in July 2013. The freeholder’s costs were kept to an absolute minimum.
In 2012 we were e-mailed by Ms J Watson who, having completed a one bedroom apartment in Deeside in May 1998. We are asked if we could estimate the price could be for a ninety year lease extension. Comparable residencies in Deeside with an extended lease were in the region of £243,000. The average amount of ground rent was £65 billed annually. The lease concluded in 2089. Given that there were 63 years remaining we calculated the premium to the landlord to extend the lease to be within £20,000 and £23,000 not including fees.
Mr Y Young took over the lease of a garden apartment in Deeside in November 2001. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Comparable properties in Deeside with a long lease were worth £181,600. The average ground rent payable was £55 collected annually. The lease lapsed on 1 January 2078. Having 52 years remaining we approximated the compensation to the freeholder for the lease extension to be within £30,400 and £35,200 exclusive of costs.