The market value of Abersoch leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase materialy once the remaining term is less than 80 years
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 further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage 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. |
Irrespective of whether you are a tenant or a freeholder in Abersoch,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Abersoch valuers.
Twenty four months ago Liam, started to get near to the eighty-year threshold with the lease on his ground floor apartment in Abersoch. Having purchased his flat two decades ago, the lease term was of minimal importance. Fortunately, he recognised he would soon be paying way over the odds for Extending the lease. Liam was able to extend his lease at the eleventh hour last January. Liam and the landlord who owned the flat above subsequently agreed on sum of £6,000 . If he had missed the deadline, the amount would have become more exhorbitant by at least £975.
Last July we were approach by Mr and Mrs. H Morgan , who took over the lease of a first floor apartment in Abersoch in March 2005. We are asked if we could estimate the price would be to prolong the lease by ninety years. Comparable residencies in Abersoch with a long lease were in the region of £205,000. The average amount of ground rent was £50 invoiced per annum. The lease came to a finish on 18 October 2105. Considering the 79 years remaining we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
In 2012 we were contacted by Mr C García who, having bought a one bedroom apartment in Abersoch in July 2012. We are asked if we could estimate the price would be for a ninety year extension to my lease. Identical residencies in Abersoch with 100 year plus lease were valued around £275,000. The average amount of ground rent was £65 billed every twelve months. The lease end date was in 2094. Given that there were 68 years unexpired we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including fees.