Aberporth leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Aberporth tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Aberporth you should investigate if your lease has between seventy and 90 years left. There are compelling reasons why a Aberporth leaseholder with a lease having around eighty years left should take steps to make sure that a lease extension is actioned without delay
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
| 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. |
Regardless of whether you are a tenant or a landlord in Aberporth,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 Aberporth valuers.
Subsequent to protracted discussions with the freeholder of her garden flat in Aberporth, Melissa initiated the lease extension process just as her lease was coming close to the crucial 80-year threshold. The legal work was concluded in November 2008. The landlord’s fees were restricted to about 600 GBP.
Last Autumn we were contacted by Mr Joseph Khan , who took over the lease of a one bedroom flat in Aberporth in March 2009. The question was if we could approximate the premium could be for a ninety year extension to my lease. Identical residencies in Aberporth with a long lease were in the region of £196,400. The average amount of ground rent was £55 collected quarterly. The lease lapsed in 2079. Taking into account 54 years remaining we approximated the compensation to the landlord for the lease extension to be within £35,200 and £40,600 exclusive of professional charges.
In 2011 we were called by Ms Aimee Ward who, having owned a ground floor apartment in Aberporth in November 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Comparable flats in Aberporth with an extended lease were worth £295,000. The average amount of ground rent was £45 billed annually. The lease ran out in 2100. Given that there were 75 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of expenses.