Unfortunately that a Fairford residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Fairford property market.Once your lease gets to 85ish years, you should 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 dips below eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Fairford will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold residencies in Fairford with more than 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Retaining our service will provide you better control over the value of your Fairford leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Arthur, came dangerously near to the 80-year threshold with the lease on his first floor flat in Fairford. In buying his property twenty years ago, the unexpired term was of minimal interest. by good luck, it dawned on him that he needed to take action soon on a lease extension. Arthur was able to extend his lease just in the nick of time in June. Arthur and the freeholder ultimately agreed on a premium of £5,500 . If he not met the deadline, the amount would have escalated by a minimum £1,100.
In 2014 we were approached by Mr and Mrs. E González who, having completed a one bedroom apartment in Fairford in June 2008. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Identical residencies in Fairford with 100 year plus lease were worth £171,800. The mid-range ground rent payable was £55 collected per annum. The lease elapsed on 28 July 2074. Given that there were 50 years remaining we estimated the compensation to the freeholder for the lease extension to be within £33,300 and £38,400 not including legals.
Mrs Freya Davis took over the lease of a studio apartment in Fairford in September 2009. We are asked if we could shed any light on how much (roughly) price could be to prolong the lease by ninety years. Identical premises in Fairford with a long lease were valued about £280,000. The mid-range ground rent payable was £45 invoiced yearly. The lease concluded on 21 February 2094. Having 70 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 not including expenses.