It’s a harsh truth that a Aston 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 loss of value being disguised by increases in the Aston property prices.Once your lease nears 85ish years, you should start thinking about 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 falls under eighty years - otherwise a higher premium will be due. The majority of flat owners in Aston will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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 | 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. |
Lease extensions in Aston can be a difficult process. We recommend you procure guidance from a lawyer and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Aston lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Dylan was the the leasehold owner of a conversion apartment in Aston being sold with a lease of a few days over fifty eight years remaining. Dylan informally contacted his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Dylan to exercise his statutory right. Dylan obtained expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2009 we were phoned by Dr Ollie Roberts who, having was assigned a lease of a ground floor flat in Aston in September 2012. The dilemma was if we could approximate the premium could be to prolong the lease by ninety years. Identical residencies in Aston with an extended lease were worth £254,200. The mid-range amount of ground rent was £60 billed yearly. The lease ended on 4 March 2075. Taking into account 51 years unexpired we estimated the compensation to the landlord for the lease extension to be within £43,700 and £50,600 exclusive of fees.
Mr and Mrs. V Bailey bought a one bedroom apartment in Aston in April 2012. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by ninety years. Comparative homes in Aston with 100 year plus lease were in the region of £210,600. The average ground rent payable was £45 invoiced quarterly. The lease termination date was on 11 June 2086. Taking into account 62 years unexpired we approximated the premium to the freeholder for the lease extension to be within £18,100 and £20,800 plus costs.