Abercarn leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result 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 ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Abercarn you must see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Abercarn with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Irrespective of whether you are a tenant or a landlord in Abercarn,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Abercarn valuers.
Austin owned a conversion apartment in Abercarn on the market with a lease of a little over 72 years unexpired. Austin on an informal basis spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Austin to invoke his statutory right. Austin obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and sell the property.
Dr R Bailey was assigned a lease of a studio flat in Abercarn in September 2012. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Comparable properties in Abercarn with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £45 collected yearly. The lease expiry date was on 28 March 2097. Considering the 72 years left we calculated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of costs.
Mrs S Jackson acquired a ground floor flat in Abercarn in March 2005. We are asked if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Comparative flats in Abercarn with an extended lease were worth £233,200. The average amount of ground rent was £60 collected annually. The lease finished in 2086. Considering the 61 years remaining we approximated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 exclusive of expenses.