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Top reasons for Askam In Furness lease extension


Top reasons for lease extension now:

A Askam In Furness lease depreciates with the years remaining on the lease.

The basic rule is, all other factors being equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Askam In Furness can extend the lease for an additional 90 years under the 1993 Leasehold Reform Act. Do give careful consideration before delaying your Askam In Furness lease extension. Postponing the costs today simply escalates the premium you will ultimately have to pay to extend the lease.

An extended lease is almost the same value as a freehold

It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.

Lending institutions may decide not to grant a mortgage with a short lease

The trend since the credit crunch has been for mortgage companies to tighten lending requirements generally - this has extended to the property over which the mortgage is to be charged. This has resulted in the unexpired lease term required by mortgage companies has increased. In the past banks would grant a mortgage on a lease with 25 years plus the term of the loan - routinely fifty year leases but those requirements are being increasingly undermined by the requirement for longer and longer leases - many now have a minimum term of 75 years as a prerequisite.

Lender Requirement
Barclays plc Mortgage term plus 25 years provided that leases of less than 85 years are be referred to us for approval.
Halifax Minimum 70 years from the date of the mortgage.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
The Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to 5 years
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Virgin 85 years at the time of completion. If it's less, we require it to be extended on or before completion.

What makes us experts in Askam In Furness lease extensions?

Irrespective of whether you are a tenant or a landlord in Askam In Furness,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Askam In Furness valuers.

Askam In Furness Lease Extension Example Cases:

Sam, Askam In Furness, Cumbria

Last October Sam, started to get close to the eighty-year threshold with the lease on his first floor apartment in Askam In Furness. In buying his property two decades ago, the unexpired term was of little concern. Thankfully, he noticed he needed to take action soon on Extending the lease. Sam arranged for a lease extension at the eleventh hour in September. Sam and the landlord ultimately settled on the final figure of £6,000 . If the lease had fallen below 80 years, the figure would have escalated by a minimum £875.

Askam In Furness case:

In 2014 we were approached by Dr Catherine Rivera who, having bought a studio apartment in Askam In Furness in June 2006. The dilemma was if we could approximate the price would be to prolong the lease by ninety years. Comparable residencies in Askam In Furness with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £65 invoiced monthly. The lease finished on 4 August 2089. Taking into account 68 years left we estimated the premium to the landlord to extend the lease to be between £13,300 and £15,400 not including professional charges.

Askam In Furness case:

Last November we were e-mailed by Mr and Mrs. S Leroy , who was assigned a lease of a garden apartment in Askam In Furness in July 2003. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Similar premises in Askam In Furness with 100 year plus lease were in the region of £213,600. The mid-range amount of ground rent was £60 collected quarterly. The lease finished in 2078. Taking into account 57 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 plus professional charges.