The re-sale value of a leasehold property in Abergavenny depends on how long the lease has left to run. If it is close to or fewer than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the lease extension process when a lease still has 82 years remaining so that a lease extension can be finalised prior to the eighty year threshold. Statute enables Abergavenny qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a supplemental term of 90 years. The reason of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Abergavenny with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Abergavenny lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Nathan was the the leasehold owner of a conversion flat in Abergavenny being sold with a lease of a few days over fifty eight years outstanding. Nathan informally contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Nathan to invoke his statutory right. Nathan obtained expert advice and secured satisfactory resolution informally and readily saleable.
In 2014 we were called by Mr Jonathan Jackson who, having acquired a basement flat in Abergavenny in April 2001. The dilemma was if we could approximate the price would likely be for a 90 year lease extension. Comparative flats in Abergavenny with a long lease were valued about £255,000. The average amount of ground rent was £50 collected monthly. The lease finished in 2097. Considering the 71 years remaining we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.
In 2009 we were contacted by Mr and Mrs. P Roux who, having moved into a studio flat in Abergavenny in September 2009. The question was if we could approximate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical homes in Abergavenny with a long lease were worth £254,200. The mid-range ground rent payable was £60 billed monthly. The lease terminated on 25 June 2077. Having 51 years remaining we calculated the premium to the freeholder to extend the lease to be between £43,700 and £50,600 exclusive of legals.