Unfortunately that a Audlem 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 deflation being disguised by increases in the Audlem property prices.Where your lease has approximately ninety years left, 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 slips below 80 years - otherwise a higher premium will be due. The majority of flat owners in Audlem will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with handle Audlem 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 conveyancing solicitor we work with provide it.
Off the back of unsuccessful correspondence with the freeholder of her studio flat in Audlem, Eleanor started the lease extension process just as the lease was coming close to the crucial eighty-year threshold. The transaction was concluded in June 2006. The freeholder’s charges were negotiated to under 600 GBP.
Last Summer we were e-mailed by Mrs F Green , who owned a purpose-built flat in Audlem in September 2008. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable premises in Audlem with 100 year plus lease were worth £208,200. The average ground rent payable was £65 billed quarterly. The lease expiry date was in 2087. Given that there were 61 years outstanding we approximated the premium to the freeholder to extend the lease to be between £19,000 and £22,000 plus legals.
In 2012 we were phoned by Dr Blake Phillips who, having moved into a purpose-built apartment in Audlem in August 2012. We are asked if we could approximate the price could be for a 90 year extension to my lease. Comparable premises in Audlem with a long lease were in the region of £260,000. The mid-range amount of ground rent was £50 billed monthly. The lease end date was in 2098. Considering the 72 years as a residual term we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of legals.