It’s a harsh certainty that a Askam In Furness residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Askam In Furness property market.Once your lease nears 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher premium will be payable. The majority of flat owners in Askam In Furness will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold residencies in Askam In Furness with more than one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Retaining our service gives you better control over the value of your Askam In Furness leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jasper owned a conversion flat in Askam In Furness being sold with a lease of a few days over sixty years left. Jasper on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £50 yearly. Ordinarily, ground rent would not be due on a lease extension were Jasper to invoke his statutory right. Jasper obtained expert advice and secured satisfactory resolution informally and sell the property.
Last Winter we were e-mailed by Dr Y Laurent , who purchased a one bedroom apartment in Askam In Furness in September 2010. We are asked if we could shed any light on how much (roughly) premium could be for a ninety year extension to my lease. Identical premises in Askam In Furness with an extended lease were in the region of £198,800. The mid-range ground rent payable was £55 billed yearly. The lease ran out on 11 July 2081. Taking into account 55 years remaining we approximated the premium to the landlord to extend the lease to be between £33,300 and £38,400 plus expenses.
Last Christmas we were e-mailed by Dr Austin Stewart , who took over the lease of a basement flat in Askam In Furness in August 2004. We are asked if we could estimate the premium would likely be to extend the lease by 90 years. Comparable premises in Askam In Furness with an extended lease were in the region of £295,000. The mid-range ground rent payable was £50 collected yearly. The lease elapsed in 2101. Considering the 75 years left we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of legals.