When it comes to domestic leasehold property in Ashtead, you effectively rent it for a certain period of time. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive especially once there are less than 80 years remaining. Anyone in Ashtead with a lease approaching 81 years remaining should seriously consider extending it without delay. Once the lease term has less than 80 years outstanding, under the relevant legislation the freeholder is entitled to calculate and charge a greater premium, assessed on a technical multiplication, known as “marriage value” which is payable.
Leasehold properties in Ashtead with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant 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 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service gives you enhanced control over the value of your Ashtead leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Oliver was the the leasehold proprietor of a high value apartment in Ashtead on the market with a lease of a few days over 59 years unexpired. Oliver on an informal basis approached his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Oliver to exercise his statutory right. Oliver obtained expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2012 we were phoned by Dr E Morris who, having purchased a ground floor flat in Ashtead in June 2005. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative residencies in Ashtead with an extended lease were valued around £191,400. The mid-range ground rent payable was £55 invoiced yearly. The lease ran out on 25 March 2080. Considering the 54 years remaining we estimated the compensation to the landlord for the lease extension to be within £34,200 and £39,600 exclusive of expenses.
An example of a Lease Extension case for a Ashtead residence is 33 The Maisonettes Alberta Avenue in June 2014. the Tribunal decided that the premium payable for the grant of a new lease be the sum of £20,680 (Twenty Thousand six hundred and eighty pounds). This case affected 1 flat. The unexpired term was 60.43 years.