Ashbourne leases on residential properties are gradually losing value. Where your lease has approximately ninety years unexpired, you should start considering the need for a lease extension. 80 years is a significant number: when the remaining term of a lease drops below this level then you start paying an additional element called marriage value. Leasehold owners in Ashbourne will mostly qualify for a lease extension; however it’s a good idea to check with a lawyer to confirm if you qualify. In certain cases you may not be entitled. There are prescribed deadlines and procedures to comply with once the process is initiated so it’s prudent to be guided by a conveyancing solicitor during the process.
Leasehold properties in Ashbourne with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
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.
During the course of the last few months Oliver, started to get near to the eighty-year mark with the lease on his first floor apartment in Ashbourne. In buying his flat two decades ago, the lease term was of minimal relevance. Fortunately, it dawned on him that he needed to take action soon on a lease extension. Oliver arranged for a lease extension just under the wire last January. Oliver and the landlord in the end agreed on sum of £5,500 . If the lease had descended lower than 80 years, the price would have escalated by at least £900.
Dr A Hill took over the lease of a purpose-built flat in Ashbourne in July 1999. We are asked if we could estimate the premium could be to prolong the lease by 90 years. Similar properties in Ashbourne with 100 year plus lease were worth £300,000. The average amount of ground rent was £50 collected every twelve months. The lease elapsed on 27 July 2101. Given that there were 76 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus fees.
Mr and Mrs. T Cook purchased a garden apartment in Ashbourne in September 2002. The question was if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Identical properties in Ashbourne with an extended lease were in the region of £257,800. The average ground rent payable was £65 billed per annum. The lease terminated on 11 August 2090. Taking into account 65 years remaining we approximated the compensation to the landlord to extend the lease to be between £18,100 and £20,800 exclusive of costs.