The market value of Aberystwyth leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the unexpired lease term is less than 80 years
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Godiva Mortgages | 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Aberystwyth 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.
18 months ago Andrew, started to get near to the eighty-year mark with the lease on his two bedroom flat in Aberystwyth. Having purchased his home two decades ago, the length of the lease was of no significance. Luckily, he realised he needed to take action soon on Extending the lease. Andrew extended the lease at the eleventh hour last July. Andrew and the landlord who owned the flat above ultimately settled on a premium of £6,000 . If he failed to meet the deadline, the price would have increased by at least £1,075.
Last Summer we were contacted by Mr and Mrs. K Patel , who was assigned a lease of a first floor flat in Aberystwyth in September 2008. The dilemma was if we could estimate the premium would be for a 90 year lease extension. Similar flats in Aberystwyth with 100 year plus lease were in the region of £285,000. The mid-range ground rent payable was £45 invoiced every twelve months. The lease elapsed on 21 July 2096. Taking into account 71 years unexpired we approximated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including expenses.
In 2013 we were phoned by Mr and Mrs. O López who, having moved into a garden flat in Aberystwyth in May 1998. The question was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Comparable residencies in Aberystwyth with 100 year plus lease were in the region of £225,800. The average amount of ground rent was £60 collected every twelve months. The lease expired on 15 February 2085. Having 60 years left we calculated the premium to the landlord to extend the lease to be between £23,800 and £27,400 exclusive of legals.