For anyone whose Aughton flat is held on a long lease, our message is clear – if nothing is done, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Aughton,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 in-depth market knowledge and the close ties they enjoy with Aughton valuers.
Hunter owned a studio apartment in Aughton being marketed with a lease of just over fifty eight years remaining. Hunter informally contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Hunter to exercise his statutory right. Hunter obtained expert advice and secured satisfactory deal informally and ending up with a market value flat.
Ms Abigail Johnson was assigned a lease of a garden apartment in Aughton in February 2011. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical properties in Aughton with 100 year plus lease were worth £275,000. The average ground rent payable was £55 invoiced monthly. The lease ran out in 2101. Taking into account 76 years remaining we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.
Mr and Mrs. G Robinson acquired a newly refurbished apartment in Aughton in July 2011. The dilemma was if we could estimate the price would be for a ninety year extension to my lease. Comparative residencies in Aughton with an extended lease were in the region of £176,200. The mid-range amount of ground rent was £65 billed every twelve months. The lease terminated on 24 January 2081. Having 56 years as a residual term we approximated the premium to the landlord to extend the lease to be within £29,500 and £34,000 not including fees.