Andover leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Andover tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Andover you should check if your lease has between seventy and 90 years left. There are good reasons why a Andover flat owner with a lease having around 80 years left should take action to make sure that a lease extension is put in place without delay
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The lawyers that we work with procure Andover 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.
Last year Felix, came very close to the 80-year threshold with the lease on his basement flat in Andover. Having purchased his flat two decades ago, the lease term was of minimal relevance. Thankfully, he became aware that he would soon be paying way over the odds for Extending the lease. Felix was able to extend his lease just in the nick of time last July. Felix and the freeholder subsequently agreed on a premium of £5,500 . If he not met the deadline, the figure would have become more costly by a minimum £875.
In 2013 we were phoned by Dr Edward Nelson who, having bought a basement apartment in Andover in September 2011. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by 90 years. Identical flats in Andover with a long lease were worth £245,000. The mid-range amount of ground rent was £50 billed per annum. The lease elapsed in 2093. Taking into account 68 years left we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including fees.
In 2013 we were approached by Mr Daniel Norbert who, having completed a basement flat in Andover in September 2007. The dilemma was if we could estimate the premium would be to extend the lease by an additional years. Comparable premises in Andover with 100 year plus lease were worth £285,000. The mid-range ground rent payable was £55 invoiced annually. The lease expired on 7 May 2104. Taking into account 79 years remaining we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus fees.