Aston leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Aston tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Aston you must see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Aston with more than one hundred years outstanding 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 situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Lease extensions in Aston can be a difficult process. We recommend you obtain guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Aston lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last Autumn Arthur, started to get near to the 80-year threshold with the lease on his first floor apartment in Aston. In buying his property 19 years previously, the lease term was of little concern. by good luck, he realised he would imminently be paying way over the odds for Extending the lease. Arthur extended the lease just under the wire in March. Arthur and the freeholder via the managing agents ultimately settled on sum of £6,000 . If the lease had dropped to less than eighty years, the amount would have escalated by a minimum £1,075.
Mrs W Baker moved into a recently refurbished flat in Aston in February 2009. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by ninety years. Similar homes in Aston with 100 year plus lease were valued about £191,000. The average amount of ground rent was £65 collected every twelve months. The lease lapsed on 18 October 2084. Given that there were 58 years outstanding we approximated the premium to the landlord to extend the lease to be within £23,800 and £27,400 plus costs.
Mr E James was assigned a lease of a purpose-built apartment in Aston in February 1999. We are asked if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Identical premises in Aston with a long lease were worth £250,000. The mid-range amount of ground rent was £50 collected quarterly. The lease expired in 2095. Taking into account 69 years remaining we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including professional charges.