Unfortunately that a Abercarn residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Abercarn property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining dips below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Abercarn will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold premises in Abercarn with more than one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. 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.
|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.
| 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;
|Minimum 70 years from the date of the mortgage.
| 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.
|85 years at the time of completion. If it's less, we require it to be extended on or before completion.
Irrespective of whether you are a tenant or a landlord in Abercarn,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Abercarn valuers.
In the wake of 6 months of lengthy correspondence with the freeholder of her two bedroom apartment in Abercarn, Laura commenced the lease extension process just as her lease was nearing the crucial eighty-year mark. The legal work was concluded in May 2007. The landlord’s costs were kept to an absolute minimum.
Last Christmas we were e-mailed by Dr Callum Díaz , who owned a one bedroom apartment in Abercarn in September 2005. The dilemma was if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparable residencies in Abercarn with a long lease were in the region of £210,000. The average amount of ground rent was £50 collected per annum. The lease ran out in 2104. Taking into account 80 years as a residual term we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including costs.
Mr and Mrs. R Norbert took over the lease of a purpose-built flat in Abercarn in November 2012. We are asked if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Comparable properties in Abercarn with a long lease were valued about £275,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease lapsed on 23 November 2093. Considering the 69 years left we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus fees.