Ashton residential property held on a long lease is a wasting asset as the leaseholder only owns the property for a period of years.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you increased control over the value of your Ashton leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Nathan, came seriously near to the 80-year threshold with the lease on his purpose- built flat in Ashton. Having bought his property two decades ago, the lease term was of minimal importance. Luckily, he recognised he needed to take action soon on Extending the lease. Nathan was able to extend his lease at the eleventh hour last August. Nathan and the landlord eventually settled on a premium of £5,500 . If the lease had gone to less than eighty years, the price would have become more exhorbitant by at least £1,100.
Last year we were phoned by Mr and Mrs. F Hall , who owned a recently refurbished flat in Ashton in March 2000. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by a further 90 years. Similar flats in Ashton with an extended lease were in the region of £208,200. The mid-range amount of ground rent was £65 invoiced monthly. The lease lapsed in 2087. Considering the 61 years as a residual term we calculated the premium to the landlord for the lease extension to be between £20,000 and £23,000 plus professional charges.
Ms Isabel Ricardo owned a first floor flat in Ashton in September 2006. The dilemma was if we could approximate the premium would likely be to extend the lease by ninety years. Identical premises in Ashton with 100 year plus lease were worth £260,000. The average amount of ground rent was £50 invoiced per annum. The lease elapsed in 2098. Taking into account 72 years outstanding we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of legals.