Unfortunately that a Aberdovey residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Aberdovey property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Aberdovey will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in Aberdovey,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Aberdovey valuers.
In 2014 Callum, came dangerously close to the 80-year threshold with the lease on his basement flat in Aberdovey. In buying his home 18 years previously, the lease term was of no bearing. Thankfully, he noticed he needed to take steps soon on Extending the lease. Callum arranged for a lease extension just ahead of time last May. Callum and the freeholder via the management company ultimately settled on a premium of £6,000 . If he failed to meet the deadline, the price would have escalated by a minimum £1,125.
Mr Omar Gunderson moved into a one bedroom apartment in Aberdovey in October 2007. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparable properties in Aberdovey with an extended lease were in the region of £186,000. The average ground rent payable was £65 billed quarterly. The lease ran out in 2083. Taking into account 58 years outstanding we estimated the premium to the freeholder for the lease extension to be within £24,700 and £28,600 plus legals.
Last Summer we were called by Mr and Mrs. B Wood , who acquired a purpose-built flat in Aberdovey in March 2011. We are asked if we could approximate the price could be for a ninety year lease extension. Comparable homes in Aberdovey with a long lease were valued about £250,000. The average ground rent payable was £50 collected monthly. The lease termination date was in 2094. Given that there were 69 years unexpired we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.