There is no doubt about it a leasehold flat or house in Aberystwyth is a wasting asset as a result of the diminishing lease term. Where the lease has, beyond 100 years to run then this decrease may be negligible that being said there will become a stage when a lease has under than eighty 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 logic behind why you should extend the lease without delay. Most flat owners in Aberystwyth will meet the qualifying criteria; nevertheless a lawyer can advise if you are eligible to extend your lease. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold premises in Aberystwyth with over 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers 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 lawyer we work with provide it.
During the course of the last few months Adam, started to get near to the 80-year mark with the lease on his two bedroom apartment in Aberystwyth. Having bought his flat two decades ago, the unexpired term was of little concern. by good luck, he realised he needed to take steps soon on Extending the lease. Adam was able to extend his lease at the eleventh hour in September. Adam and the freeholder ultimately agreed on a premium of £5,500 . If the lease had gone below 80 years, the amount would have become more costly by at least £875.
Dr Sian Khan purchased a purpose-built flat in Aberystwyth in February 2008. The question was if we could estimate the premium would be for a ninety year extension to my lease. Comparable flats in Aberystwyth with an extended lease were worth £181,600. The mid-range ground rent payable was £55 billed per annum. The lease ended in 2077. Given that there were 52 years unexpired we approximated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 not including legals.
Dr J Gray acquired a ground floor apartment in Aberystwyth in June 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year lease extension. Comparative premises in Aberystwyth with an extended lease were worth £285,000. The average amount of ground rent was £45 invoiced yearly. The lease came to a finish in 2097. Given that there were 72 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.