Axminster leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Axminster tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Axminster you should investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty 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
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Axminster,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 Axminster valuers.
After unsuccessful negotiations with the freeholder of her two bedroom flat in Axminster, Lily commenced the lease extension process just as the lease was coming close to the all-important eighty-year threshold. The transaction completed in April 2006. The freeholder’s charges were kept to an absolute minimum.
In 2014 we were approached by Mrs Alice Gómez who, having was assigned a lease of a recently refurbished flat in Axminster in May 2001. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year lease extension. Similar flats in Axminster with an extended lease were in the region of £260,200. The mid-range ground rent payable was £65 invoiced every twelve months. The lease came to a finish in 2091. Having 66 years outstanding we estimated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 exclusive of costs.
In 2010 we were e-mailed by Mrs A Walker who, having completed a studio flat in Axminster in October 2010. The dilemma was if we could approximate the premium would likely be to prolong the lease by a further 90 years. Similar premises in Axminster with a long lease were worth £198,800. The average amount of ground rent was £55 invoiced per annum. The lease elapsed on 23 February 2080. Taking into account 55 years unexpired we estimated the premium to the landlord for the lease extension to be between £33,300 and £38,400 exclusive of professional charges.