Unfortunately that a Ash residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Ash property market.Once your lease nears 85ish years, 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 under eighty years - otherwise a higher premium will be payable. Most leasehold owners in Ash will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
Leasehold premises in Ash with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
Using our service gives you better control over the value of your Ash leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Owen owned a studio apartment in Ash being marketed with a lease of fraction over fifty eight years unexpired. Owen on an informal basis contacted his freeholder a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Owen to exercise his statutory right. Owen procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Mr and Mrs. K Sharif moved into a one bedroom apartment in Ash in June 2006. The question was if we could approximate the price could be to prolong the lease by ninety years. Comparative flats in Ash with a long lease were worth £232,800. The mid-range ground rent payable was £45 invoiced annually. The lease expired on 27 May 2090. Taking into account 65 years outstanding we approximated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of legals.
Mr and Mrs. M Brooks took over the lease of a garden flat in Ash in May 1998. We are asked if we could shed any light on how much (approximately) premium would likely be for a ninety year lease extension. Comparable properties in Ash with a long lease were in the region of £275,000. The average amount of ground rent was £55 billed quarterly. The lease terminated on 24 June 2101. Having 76 years remaining we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus professional charges.