Owning a flat usually means owning a lease of the property, which has a finite term of years. This lease will ordinarily be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Ashtead. Inevitably, the length of lease remaining shortens over time. This is often overlooked and only becomes a problem when the residence needs to be sold or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Qualifying long lease owners in Ashtead have the right to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. You should give due attention before putting off your Ashtead lease extension. Holding off the cost now simply increases the price you will eventually incur for a lease extension
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Ashtead 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.
Two years ago Liam, came perilously near to the eighty-year mark with the lease on his first floor apartment in Ashtead. Having purchased his property two decades ago, the lease term was of minimal significance. Luckily, he realised he needed to take action soon on Extending the lease. Liam arranged for a lease extension at the eleventh hour in September. Liam and the landlord who owned the flat above subsequently settled on an amount of £5,500 . If he had missed the deadline, the price would have gone up by a minimum £850.
Last January we were approach by Dr I Dupont , who acquired a one bedroom flat in Ashtead in February 1995. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Comparative flats in Ashtead with a long lease were valued about £275,000. The average ground rent payable was £65 invoiced per annum. The lease concluded on 3 June 2094. Given that there were 68 years unexpired we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus costs.
An example of a Lease Extension decision 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 related to 1 flat. The unexpired lease term was 60.43 years.