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Why you should commence your Ashton lease extension


Top reasons for lease extension now:

Increase your lease and increase your Ashton property value

Ashton leases on domestic deteriorating in value. if your lease has approximately ninety years unexpired, you should start considering the need for a lease extension. If lease term is less than 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Ashton will mostly qualify for a lease extension; however It would be wise to check with a lawyer to check your eligibility. In some cases you may not be entitled. There are also strict deadlines and steps to comply with once the process has started so it’s sensible to be guided by a conveyancer during the process.

Ashton property with a lease extension is almost the same value as a freehold

It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.

Banks and Building Societies may not grant a mortgage on a short lease

The propensity since the credit crunch has been for lenders to tighten lending criteria across the board - this has extended to the types of security over which the mortgage is to be charged. This has resulted in the minimum number of years remaining under the lease required by banks has increased. Historically lenders would lend on a lease with 25 years plus the term of the loan - typically fifty year leases but those requirements have been chipped away by the requirement for longer and longer leases - many use a minimum term of 75 years as a prerequisite.

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.
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.

Get in touch with one of our Ashton lease extension solicitors or enfranchisement solicitors

Irrespective of whether you are a tenant or a landlord in Ashton,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Ashton valuers.

Ashton Lease Extension Case Summaries:

Joshua, Ashton, Bristol,

Joshua was the the leasehold proprietor of a conversion flat in Ashton on the market with a lease of just over sixty years remaining. Joshua on an informal basis approached his landlord being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Joshua to invoke his statutory right. Joshua procured expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.

Ashton case:

Last September we were phoned by Dr Leo Walker , who was assigned a lease of a studio apartment in Ashton in March 2012. We are asked if we could estimate the price would likely be to extend the lease by an additional years. Comparable premises in Ashton with an extended lease were worth £255,000. The mid-range amount of ground rent was £50 collected per annum. The lease ended in 2096. Taking into account 71 years unexpired we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.

Ashton case:

Last March we were e-mailed by Mr and Mrs. B Ricardo , who owned a basement flat in Ashton in May 2005. The dilemma was if we could approximate the price would likely be for a 90 year lease extension. Similar flats in Ashton with an extended lease were valued about £249,200. The mid-range amount of ground rent was £60 invoiced annually. The lease concluded in 2076. Given that there were 51 years outstanding we calculated the premium to the landlord to extend the lease to be within £43,700 and £50,600 plus legals.