It’s an underpublicised certainty that a Aberystwyth residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Aberystwyth property prices.Once your lease nears 85ish years, 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 dips under 80 years - otherwise a higher amount will be due. The majority of leasehold owners in Aberystwyth will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold properties in Aberystwyth with over 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth 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 estate charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Aberystwyth,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 experience and the close ties they enjoy with Aberystwyth valuers.
Jack owned a high value apartment in Aberystwyth being marketed with a lease of just over 59 years remaining. Jack on an informal basis spoke with his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Jack to invoke his statutory right. Jack procured expert advice and secured satisfactory deal without going to tribunal and ending up with a market value flat.
Mr W Mitchell purchased a one bedroom flat in Aberystwyth in March 2008. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Similar premises in Aberystwyth with an extended lease were worth £275,000. The mid-range amount of ground rent was £65 collected yearly. The lease terminated in 2094. Taking into account 68 years outstanding we calculated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including legals.
Mr and Mrs. A Jones bought a ground floor apartment in Aberystwyth in March 1999. We are asked if we could shed any light on how much (roughly) price would likely be to extend the lease by 90 years. Comparative flats in Aberystwyth with a long lease were worth £208,600. The mid-range amount of ground rent was £60 invoiced annually. The lease lapsed on 25 April 2083. Given that there were 57 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 not including expenses.