Unfortunately that a Gwernaffield residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. 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 Gwernaffield property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining dips below eighty 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 Gwernaffield will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety 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 |
|---|---|
| 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. |
| 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; |
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with handle Gwernaffield 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.
Blake owned a conversion apartment in Gwernaffield on the market with a lease of a few days over sixty years outstanding. Blake on an informal basis approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Blake to invoke his statutory right. Blake procured expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Mr Jake Bailey took over the lease of a basement apartment in Gwernaffield in June 2003. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Identical flats in Gwernaffield with 100 year plus lease were valued about £200,000. The average amount of ground rent was £50 billed quarterly. The lease lapsed on 24 November 2104. Considering the 78 years left we estimated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including professional charges.
Last Summer we were phoned by Ms Elizabeth Peterson , who owned a purpose-built flat in Gwernaffield in November 2005. We are asked if we could estimate the premium could be for a ninety year lease extension. Similar flats in Gwernaffield with 100 year plus lease were in the region of £267,600. The mid-range amount of ground rent was £65 billed quarterly. The lease elapsed in 2093. Having 67 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £14,300 and £16,400 exclusive of legals.