Top reasons for Aberbargoed lease extension
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Why you should commence your Aberbargoed lease extension today: </h3>
<h4> A <a href="http://www.lendermonitor.com/conveyancing/loc/aberbargoed">Aberbargoed</a> lease depreciates with the years remaining on the lease.
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<p> The value of Aberbargoed leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate substantially once the unexpired lease term is less than 80 years
<h4>An extended lease is almost the same value as a freehold</h4>
<p> It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for decades to come.
<h4>Mortgage lenders may not lend with a short lease</h4> Mortgage lenders are less likely to give a loan offer on a residential property in Aberbargoed with a short lease. Many lenders simply refuse a mortgage on leases with under 75 years left.
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<td>Coventry Building Society</td>
<td> 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.
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<td>Skipton Building Society</td>
<td> 85 years from the date of completion of the mortgage<br /><br />For Buy to Let cases:<br />- lettings must not breach any of the lessee’s covenants; and<br />- consent of the lessor to lettings must be obtained if necessary
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<td>The Mortgage Works</td>
<td> Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. <br />Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:<br /><br />Second hand property:<br />- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years <br />- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported<br />- For equity share applications - advise us if the actual lease term is different than reported on the offer<br /><br />New build property:<br />- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)<br />- For equity share applications - always advise us if the actual lease term is different than reported on the offer<br /><br />Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.<br /><br />SECOND HAND PROPERTIES<br /><br />Unacceptable - advise Issuing Office (Will be declined):<br />- Unexpired lease term less than 70 years<br />- Less than 30 years remaining at the end of the mortgage term<br />- Ground Rent greater than 0.5% of the property value<br />- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more<br />- Ground Rent is compounded RPI<br />- Ground Rent review period less than or equal to 5 years<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Unexpired lease term is 70 to 85 years<br />- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value<br />- Ground Rent escalation is linked to any indices greater than RPI<br />- Ground Rent escalation is linked to the value of the building*<br />- Ground Rent review period is greater than 5 and less than 10 years<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything that appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office): <br />- Unexpired lease term greater than 85 years<br />- Ground Rent less than or equal to 0.1% of the property value<br />- Ground Rent review period greater than or equal to 10 years<br />- Ground Rent escalation less than or equal to RPI<br /><br />NEW BUILD PROPERTIES (includes office conversions)<br /><br />Unacceptable - advise Issuing Office (will be declined):<br />- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house <br />- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis<br />- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology<br /><br />Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):<br />- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc<br />- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)<br />- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)<br />- Anything else appears onerous, unusual or out of the ordinary<br /><br />Acceptable (no requirement to advise Issuing Office):<br />- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house <br />- A lease subject to a peppercorn ground rent (annual rent) charges <br /><br />For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance <br /><br />* Where the Ground Rent escalation is linked to the value of the building, please provide the following:<br />- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? <br />- The current valuation and Ground Rent for each unit<br />- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?<br />- What is the right of appeal? And is this a documented process within the lease?<br />- Who bears the cost of the valuation (and appeal) process?<br />- Confirmation the review period is not less than twenty years<br /><br />LEASE EXTENSIONS<br /><br />We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office <br /><br />Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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<td>Royal Bank of Scotland</td>
<td> Mortgage term plus 30 years.
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<td>Yorkshire Building Society</td>
<td> 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.
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<h4> Get in touch with one of our Aberbargoed lease extension solicitors or enfranchisement solicitors
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<p> Using our service gives you better control over the value of your Aberbargoed leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell.
The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions. <h4>
Aberbargoed Lease Extension Case Studies:
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<h5> Hugo, Aberbargoed, Caerphilly,</h5>
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Hugo was the the leasehold owner of a high value apartment in Aberbargoed being sold with a lease of fraction over 61 years unexpired. Hugo informally approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Hugo to invoke his statutory right. Hugo obtained expert advice and secured an acceptable resolution without resorting to tribunal and readily saleable.
<h5>Aberbargoed case:</h5>
<p> Dr Tia Reed bought a purpose-built flat in Aberbargoed in November 1997. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar homes in Aberbargoed with a long lease were in the region of £250,000. The mid-range ground rent payable was £50 collected every twelve months. The lease terminated on 13 August 2096. Considering the 70 years left we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.
<h5>Aberbargoed case:</h5>
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Last Winter we were contacted by Ms Chloe Wood , who
was assigned a lease of a purpose-built flat in Aberbargoed in September 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Identical premises in Aberbargoed with an extended lease were in the region of £246,800. The average ground rent payable was £60 collected yearly. The lease ran out on 11 July 2076. Considering the 50 years remaining we estimated the compensation to the freeholder to extend the lease to be between £44,700 and £51,600 plus expenses.
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