With a long leasehold premises in Aberbargoed, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive particularly when there are less than 80 years left. Leasehold owners in Aberbargoed with a lease drawing near to 81 years left should seriously consider extending it without delay. When the lease term has below 80 years left, under the current statute the landlord is entitled to calculate and demand a larger amount, assessed on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold premises in Aberbargoed with in excess of one hundred years remaining on the lease are sometimes 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 service charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Lease extensions in Aberbargoed can be a difficult process. We recommend you procure guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Aberbargoed lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
John owned a studio flat in Aberbargoed being marketed with a lease of a little over 61 years outstanding. John informally contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were John to exercise his statutory right. John obtained expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2013 we were called by Ms Morgan Bennett who, having took over the lease of a purpose-built flat in Aberbargoed in September 2003. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by an additional years. Comparative premises in Aberbargoed with a long lease were worth £203,200. The average ground rent payable was £65 invoiced quarterly. The lease termination date was on 12 June 2087. Having 61 years remaining we calculated the compensation to the landlord to extend the lease to be between £20,000 and £23,000 not including legals.
In 2011 we were contacted by Mr and Mrs. I Watson who, having owned a purpose-built apartment in Aberbargoed in May 2008. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Identical properties in Aberbargoed with an extended lease were in the region of £260,000. The average ground rent payable was £50 collected annually. The lease came to a finish in 2097. Considering the 71 years unexpired we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including costs.