With a domestic leasehold property in Abercarn, you are actually buying an entitlement to reside in a property for a set period of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater notably once there are less than 80 years remaining. Anyone in Abercarn with a lease approaching 81 years left should seriously consider extending it without delay. Once the lease term has below eighty years left, under the current legislation the freeholder is entitled to calculate and demand a larger premium, based on a technical calculation, known as “marriage value” which is due.
Leasehold properties in Abercarn with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you enhanced control over the value of your Abercarn leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Edward, came precariously near to the 80-year mark with the lease on his two bedroom apartment in Abercarn. In buying his home 19 years ago, the length of the lease was of minimal significance. Thankfully, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. Edward arranged for a lease extension at the eleventh hour in March. Edward and the landlord who owned the flat above subsequently agreed on the final figure of £5,000 . If he not met the deadline, the amount would have increased by at least £875.
Last Christmas we were contacted by Dr T Ricardo , who was assigned a lease of a recently refurbished flat in Abercarn in June 2009. We are asked if we could approximate the premium could be for a 90 year lease extension. Comparative premises in Abercarn with 100 year plus lease were worth £280,000. The mid-range ground rent payable was £45 collected per annum. The lease ended on 4 July 2095. Given that there were 70 years outstanding we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 not including costs.
Last Autumn we were phoned by Dr Caitlin Lee , who purchased a one bedroom apartment in Abercarn in July 2012. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Identical properties in Abercarn with a long lease were in the region of £223,400. The mid-range ground rent payable was £60 billed quarterly. The lease expiry date was in 2084. Taking into account 59 years unexpired we estimated the premium to the freeholder for the lease extension to be within £27,600 and £31,800 not including expenses.