Nantyglo leases on residential properties are gradually losing 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 Nantyglo 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 Nantyglo you would be well advised to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty 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
It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with procure Nantyglo 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.
Subsequent to lengthy correspondence with the landlord of her basement flat in Nantyglo, Rosie commenced the lease extension process just as the lease was approaching the critical eighty-year threshold. The transaction completed in October 2006. The freeholder’s costs were restricted to about 700 GBP.
Last Autumn we were phoned by Mrs B David , who was assigned a lease of a newly refurbished flat in Nantyglo in August 2010. We are asked if we could approximate the price would likely be for a ninety year lease extension. Similar premises in Nantyglo with 100 year plus lease were in the region of £285,000. The mid-range ground rent payable was £45 invoiced per annum. The lease terminated in 2096. Given that there were 71 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including expenses.
Dr K Parker took over the lease of a purpose-built flat in Nantyglo in February 2002. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative flats in Nantyglo with an extended lease were worth £230,800. The average amount of ground rent was £60 billed annually. The lease lapsed on 13 October 2085. Considering the 60 years unexpired we calculated the compensation to the landlord to extend the lease to be within £24,700 and £28,600 plus fees.