It’s a harsh truth that a Allestree residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Allestree property prices.Once your lease gets to 85ish years, you need to 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 slips under 80 years - otherwise a higher premium will be due. Most flat owners in Allestree will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the process.
It is generally considered that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with undertake Allestree 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 conveyancer we work with provide it.
Subsequent to protracted discussions with the freeholder of her two bedroom apartment in Allestree, Jade initiated the lease extension process as the eighty year deadline was swiftly advancing. The lease extension completed in August 2015. The freeholder’s costs were restricted to approximately 650 pounds.
In 2010 we were contacted by Mr and Mrs. K Harris who, having completed a recently refurbished flat in Allestree in April 2011. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Identical homes in Allestree with 100 year plus lease were valued about £205,000. The mid-range ground rent payable was £50 invoiced annually. The lease finished on 5 February 2104. Having 79 years unexpired we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.
Mr and Mrs. J Bernard moved into a basement flat in Allestree in February 2002. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Similar homes in Allestree with a long lease were in the region of £275,000. The average ground rent payable was £65 invoiced yearly. The lease terminated on 15 September 2093. Having 68 years outstanding we estimated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including costs.