Abingdon leases on domestic properties are gradually losing value. Where your lease has about 90 years left, you should start thinking about a lease extension. Eighty years is a significant number: when the remaining term of a lease dips below this level then you begin paying an additional element called marriage value. Flat owners in Abingdon will mostly qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to check if you qualify. In certain circumstances you may not qualify. There are also strict deadlines and steps to comply with once the process is initiated so it’s wise to be guided by a lawyer during the process.
Leasehold premises in Abingdon with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Abingdon 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 lawyer we work with provide it.
Subsequent to lengthy discussions with the freeholder of her garden apartment in Abingdon, Georgina initiated the lease extension process just as her lease was nearing the crucial eighty-year deadline. The transaction completed in July 2008. The landlord’s charges were negotiated to approximately 650 pounds.
In 2013 we were called by Ms D Mercier who, having moved into a first floor flat in Abingdon in November 1995. The question was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Identical flats in Abingdon with an extended lease were valued around £240,600. The average amount of ground rent was £60 billed quarterly. The lease lapsed on 13 February 2088. Taking into account 62 years outstanding we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 exclusive of costs.
Mr and Mrs. A Watson moved into a newly refurbished apartment in Abingdon in August 2010. We are asked if we could estimate the premium could be for a 90 year lease extension. Identical residencies in Abingdon with an extended lease were worth £174,200. The average amount of ground rent was £55 billed every twelve months. The lease terminated on 5 April 2077. Given that there were 51 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 plus fees.