Unfortunately that a Aberbargoed residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Aberbargoed property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher premium will be due. The majority of flat owners in Aberbargoed will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold properties in Aberbargoed with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Coventry Building Society | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you better control over the value of your Aberbargoed leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Hunter was the the leasehold owner of a studio apartment in Aberbargoed being sold with a lease of a few days over sixty years remaining. Hunter informally contacted his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Hunter to invoke his statutory right. Hunter procured expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Mr and Mrs. S Roberts took over the lease of a one bedroom flat in Aberbargoed in August 2010. The dilemma was if we could estimate the premium would be to prolong the lease by an additional years. Comparative properties in Aberbargoed with an extended lease were in the region of £235,200. The average amount of ground rent was £45 billed quarterly. The lease ended on 1 October 2092. Considering the 66 years unexpired we calculated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.
In 2013 we were called by Mrs T Hernández who, having was assigned a lease of a garden flat in Aberbargoed in September 2002. The dilemma was if we could estimate the price could be to prolong the lease by an additional years. Identical residencies in Aberbargoed with a long lease were valued around £275,000. The mid-range amount of ground rent was £55 invoiced monthly. The lease ended in 2103. Given that there were 77 years outstanding we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of expenses.