Unfortunately that a Ardwick residential lease is a wasting 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 deflation being disguised by increases in the Ardwick property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term slips below 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Ardwick will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold residencies in Ardwick with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold 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. |
| 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; |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Ardwick 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 lawyer we work with provide it.
After protracted discussions with the landlord of her two bedroom apartment in Ardwick, Zoe commenced the lease extension process just as the lease was nearing the critical 80-year threshold. The legal work was concluded in February 2010. The freeholder’s costs were kept to an absolute minimum.
Mr Austin Morel completed a garden apartment in Ardwick in August 1997. The question was if we could shed any light on how much (approximately) price would likely be to extend the lease by ninety years. Similar premises in Ardwick with a long lease were valued about £245,000. The average ground rent payable was £50 collected annually. The lease termination date was on 9 October 2094. Given that there were 68 years remaining we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus expenses.
Mr Hunter Pérez bought a basement apartment in Ardwick in March 2004. We are asked if we could estimate the price could be for a ninety year lease extension. Identical properties in Ardwick with 100 year plus lease were worth £285,000. The average ground rent payable was £55 collected monthly. The lease concluded in 2105. Considering the 79 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 not including expenses.