With a domestic leasehold property in Ebbw Vale, you effectively rent it for a certain period of time. In recent years flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are less than eighty years remaining. Residents in Ebbw Vale with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. Once a lease has under 80 years left, under the relevant Act the freeholder is entitled to calculate and levy a larger premium, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional 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 |
|---|---|
| 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; |
| 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. |
| 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. |
| 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. |
The lawyers that we work with procure Ebbw Vale 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.
Last October Kyle, started to get near to the eighty-year threshold with the lease on his one bedroom apartment in Ebbw Vale. In buying his flat 19 years ago, the unexpired term was of no importance. Fortunately, he recognised he would imminently be paying way over the odds for Extending the lease. Kyle extended the lease just under the wire in April. Kyle and the freeholder via the management company ultimately settled on the final figure of £5,500 . If he failed to meet the deadline, the premium would have escalated by at least £850.
In 2012 we were contacted by Ms P Gunderson who, having owned a one bedroom apartment in Ebbw Vale in August 2003. The dilemma was if we could estimate the premium would be for a ninety year extension to my lease. Identical homes in Ebbw Vale with an extended lease were valued about £280,000. The mid-range amount of ground rent was £55 invoiced yearly. The lease lapsed in 2103. Having 77 years unexpired we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus professional charges.
In 2010 we were e-mailed by Mr and Mrs. E Miller who, having took over the lease of a one bedroom apartment in Ebbw Vale in November 2011. The question was if we could estimate the premium could be for a ninety year lease extension. Similar residencies in Ebbw Vale with a long lease were worth £183,600. The average amount of ground rent was £65 billed every twelve months. The lease elapsed on 7 March 2083. Having 57 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 plus fees.