It’s a harsh truth that a Acrefair residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Acrefair property prices.Where your lease has approximately 90 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 lower than eighty years - otherwise a higher premium will be due. Most flat owners in Acrefair will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Acrefair,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Acrefair valuers.
Andrew owned a conversion flat in Acrefair being sold with a lease of just over 72 years outstanding. Andrew on an informal basis spoke with his freeholder a well known London-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Andrew to exercise his statutory right. Andrew obtained expert advice and secured satisfactory deal informally and sell the flat.
Last Winter we were e-mailed by Mr Milo Thompson , who acquired a one bedroom flat in Acrefair in June 2009. The dilemma was if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Comparative flats in Acrefair with 100 year plus lease were valued around £242,600. The average amount of ground rent was £45 billed per annum. The lease expired on 24 January 2093. Taking into account 67 years as a residual term we estimated the premium to the landlord to extend the lease to be between £11,400 and £13,200 not including costs.
In 2012 we were phoned by Mr E López who, having owned a one bedroom apartment in Acrefair in May 2012. We are asked if we could shed any light on how much (approximately) price would be to prolong the lease by 90 years. Comparative homes in Acrefair with a long lease were worth £280,000. The mid-range ground rent payable was £55 billed yearly. The lease finished on 16 October 2104. Having 78 years unexpired we approximated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of legals.