For anyone whose Ascot home is held on a long lease, the message is clear – if you do nothing, the property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Using our service gives you increased control over the value of your Ascot leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Freddie was the the leasehold proprietor of a 2 bedroom flat in Ascot being marketed with a lease of fraction over sixty years left. Freddie on an informal basis approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Freddie to invoke his statutory right. Freddie procured expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Last Spring we were e-mailed by Mr and Mrs. L Lefèvre , who completed a basement apartment in Ascot in January 2001. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Comparative flats in Ascot with 100 year plus lease were in the region of £216,000. The mid-range amount of ground rent was £60 billed yearly. The lease finished in 2083. Given that there were 58 years left we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 not including fees.
Mrs Victoria Wood completed a studio apartment in Ascot in March 2001. The question was if we could approximate the premium could be to prolong the lease by ninety years. Similar flats in Ascot with an extended lease were worth £200,000. The average amount of ground rent was £50 invoiced monthly. The lease expired in 2103. Having 78 years remaining we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.