The nearer a domestic lease in Deeside nears to zero years unexpired, the the greater the reduction in the value of the property. Where the residual term has, over 125 years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has less than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the primary rational as to why you should extend the lease sooner rather than later. Most flat owners in Deeside will meet the qualifying criteria; that being said a conveyancer should be able to advise whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for under two years.
Leasehold residencies in Deeside with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit 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. |
| Bank of Scotland | 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. |
| 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 conveyancers that we work with handle 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 conveyancer we work with provide it.
In recent months Adam, came seriously near to the eighty-year mark with the lease on his garden flat in Deeside. Having bought his home 18 years ago, the length of the lease was of no bearing. As luck would have it, he noticed he would imminently be paying an inflated amount for a lease extension. Adam was able to extend his lease at the eleventh hour in March. Adam and the landlord in the end settled on sum of £5,000 . If he had missed the deadline, the sum would have increased by at least £1,025.
In 2014 we were contacted by Mrs Rebecca Jackson who, having owned a studio flat in Deeside in November 2007. The question was if we could estimate the premium could be to prolong the lease by ninety years. Comparative properties in Deeside with a long lease were valued about £201,200. The average amount of ground rent was £55 collected per annum. The lease expiry date was in 2082. Given that there were 56 years left we calculated the premium to the landlord for the lease extension to be between £31,400 and £36,200 not including expenses.
In 2009 we were contacted by Mr and Mrs. T Thompson who, having was assigned a lease of a basement flat in Deeside in June 1997. The question was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Identical residencies in Deeside with 100 year plus lease were valued around £300,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease terminated in 2102. Taking into account 76 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus costs.