When it comes to domestic leasehold premises in Abergele, you are actually purchasing a right to live 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 should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive especially when there are less than eighty years left. Leasehold owners in Abergele with a lease nearing 81 years remaining should seriously consider extending it as soon as possible. Once the lease term has below 80 years left, under the relevant Act the freeholder is entitled to calculate and demand a greater premium, assessed on a technical calculation, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | 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; |
| 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with handle Abergele 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 conveyancer we work with provide it.
Last Christmas Thomas, started to get close to the eighty-year threshold with the lease on his ground floor flat in Abergele. Having bought his property twenty years ago, the unexpired term was of little significance. Luckily, he became aware that he needed to take action soon on a lease extension. Thomas extended the lease at the eleventh hour last March. Thomas and the freeholder via the management company subsequently settled on an amount of £5,500 . If the lease had slid lower than eighty years, the premium would have gone up by a minimum £900.
In 2009 we were e-mailed by Ms Morgan Young who, having acquired a one bedroom flat in Abergele in February 2010. We are asked if we could shed any light on how much (approximately) price would be to extend the lease by 90 years. Similar premises in Abergele with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £55 billed every twelve months. The lease lapsed in 2102. Having 77 years left we calculated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of expenses.
In 2013 we were called by Dr A Rogers who, having owned a first floor apartment in Abergele in October 2001. We are asked if we could approximate the premium would be for a 90 year lease extension. Comparative residencies in Abergele with a long lease were valued about £183,600. The mid-range amount of ground rent was £65 collected per annum. The lease ran out in 2082. Given that there were 57 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of fees.