The value of Ashbourne leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the remaining term is less than 80 years
It is generally considered that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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The conveyancers that we work with handle Ashbourne 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 conveyancer we work with provide it.
James was the the leasehold proprietor of a studio apartment in Ashbourne being sold with a lease of a few days over 59 years left. James informally approached his freeholder being a well known London-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were James to exercise his statutory right. James obtained expert legal guidance and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2012 we were e-mailed by Ms B Bernard who, having purchased a ground floor apartment in Ashbourne in June 2005. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Identical properties in Ashbourne with a long lease were worth £174,200. The mid-range ground rent payable was £55 billed quarterly. The lease expired on 11 June 2077. Given that there were 51 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 plus expenses.
In 2012 we were contacted by Mr and Mrs. R Murphy who, having acquired a ground floor flat in Ashbourne in April 2002. We are asked if we could estimate the price would likely be to extend the lease by an additional years. Similar residencies in Ashbourne with a long lease were in the region of £285,000. The average amount of ground rent was £45 collected monthly. The lease ended on 15 November 2097. Given that there were 71 years remaining we approximated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including fees.