It’s an underpublicised truth that a Aberystwyth residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Aberystwyth property prices.Once your lease nears 85ish years, you should 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 dips under eighty years - otherwise a higher premium will be due. Most leasehold owners in Aberystwyth will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold residencies in Aberystwyth with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
Engaging our service will provide you increased control over the value of your Aberystwyth leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to protracted negotiations with the landlord of her garden apartment in Aberystwyth, Isabelle started the lease extension process as the eighty year deadline was quickly approaching. The lease extension completed in August 2010. The freeholder’s charges were restricted to a tad over six hundred pounds.
Mrs Chantelle Morel took over the lease of a purpose-built flat in Aberystwyth in October 1996. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Comparable residencies in Aberystwyth with 100 year plus lease were valued around £205,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease expired on 27 June 2104. Having 79 years remaining we calculated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of legals.
Mrs Ellie François was assigned a lease of a basement apartment in Aberystwyth in January 2009. The question was if we could approximate the price would likely be to prolong the lease by an additional years. Identical premises in Aberystwyth with a long lease were valued around £275,000. The mid-range amount of ground rent was £65 billed every twelve months. The lease elapsed on 9 March 2093. Given that there were 68 years left we estimated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including expenses.