It’s a harsh certainty that a Aldermanbury residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Aldermanbury property market.Once your lease gets to 85ish years, you should 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 below 80 years - otherwise a higher amount will be due. Most flat owners in Aldermanbury will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| 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 75 years plus the term of the mortgage at the outset 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. |
The conveyancers that we work with handle Aldermanbury 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.
Evan owned a high value flat in Aldermanbury being marketed with a lease of fraction over 59 years unexpired. Evan on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be payable on a lease extension were Evan to exercise his statutory right. Evan obtained expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
Ms J Wright purchased a purpose-built apartment in Aldermanbury in September 1999. The dilemma was if we could estimate the premium could be to prolong the lease by a further 90 years. Comparable homes in Aldermanbury with a long lease were in the region of £205,000. The mid-range ground rent payable was £50 invoiced per annum. The lease finished on 8 March 2105. Having 79 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus legals.
An example of a Lease Extension case for a Aldermanbury premises is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case was in relation to 2 flats. The number of years remaining on the existing lease(s) was 72.39 years.