Abercarn 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 the lease becomes more expensive. It is the case that most Abercarn tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Abercarn you would be well advised to see if your lease has between 70 and ninety years remaining. There are good reasons why a Abercarn leaseholder with a lease having around 80 years unexpired should take action to make sure that a lease extension is actioned without delay
It is generally accepted that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Lease extensions in Abercarn can be a difficult process. We recommend you secure 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 procuring Abercarn lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Luca, came very near to the 80-year threshold with the lease on his ground floor apartment in Abercarn. Having purchased his home twenty years ago, the length of the lease was of no bearing. Fortunately, he recognised he needed to take action soon on a lease extension. Luca was able to extend his lease just in the nick of time in March. Luca and the freeholder in the end agreed on the final figure of £5,000 . If the lease had descended to less than 80 years, the price would have increased by at least £925.
Mr and Mrs. U Cox moved into a one bedroom flat in Abercarn in July 1995. The question was if we could approximate the price would likely be for a ninety year extension to my lease. Comparable flats in Abercarn with 100 year plus lease were in the region of £216,000. The average amount of ground rent was £60 collected annually. The lease finished on 17 February 2083. Considering the 58 years unexpired we approximated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 plus professional charges.
In 2009 we were approached by Dr Kelsey Michel who, having acquired a first floor apartment in Abercarn in October 1996. We are asked if we could estimate the price would be for a ninety year extension to my lease. Comparative premises in Abercarn with a long lease were valued about £200,000. The average ground rent payable was £50 invoiced every twelve months. The lease ended on 28 January 2103. Having 78 years unexpired we approximated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 not including costs.