It’s an underpublicised certainty that a Nantyglo residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Nantyglo property prices.Where your lease has approximately 90 years left, you need to start considering 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 lower than eighty years - otherwise a higher amount will be payable. The majority of flat owners in Nantyglo will be able to extend under the legislation; however a conveyancer will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold properties in Nantyglo with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Nantyglo,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Nantyglo valuers.
Archie was the the leasehold owner of a conversion apartment in Nantyglo on the market with a lease of fraction over fifty eight years outstanding. Archie on an informal basis contacted his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Archie to exercise his statutory right. Archie obtained expert advice and secured satisfactory resolution informally and ending up with a market value flat.
Mr M Dupont acquired a one bedroom apartment in Nantyglo in November 2008. The dilemma was if we could approximate the premium could be to prolong the lease by 90 years. Comparable residencies in Nantyglo with an extended lease were valued about £290,000. The mid-range ground rent payable was £45 collected monthly. The lease elapsed in 2097. Considering the 72 years remaining we estimated the premium to the freeholder to extend the lease to be within £11,400 and £13,200 not including costs.
Last month we were phoned by Mr R Howard , who bought a first floor flat in Nantyglo in March 2009. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by an additional years. Comparable homes in Nantyglo with an extended lease were valued about £233,200. The average ground rent payable was £60 collected annually. The lease lapsed on 9 August 2086. Having 61 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £22,800 and £26,400 exclusive of legals.