The value of Axminster leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase materialy once the remaining term is below than eighty years
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
The lawyers that we work with procure Axminster lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Joseph owned a 2 bedroom flat in Axminster on the market with a lease of just over 61 years outstanding. Joseph on an informal basis approached his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Joseph to exercise his statutory right. Joseph obtained expert advice and secured satisfactory resolution informally and sell the property.
Mr Dylan Gray was assigned a lease of a one bedroom apartment in Axminster in September 1999. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Similar residencies in Axminster with 100 year plus lease were worth £205,000. The mid-range ground rent payable was £50 collected yearly. The lease terminated on 16 May 2103. Given that there were 78 years as a residual term we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including expenses.
In 2010 we were phoned by Ms I Edwards who, having was assigned a lease of a garden apartment in Axminster in July 2008. We are asked if we could estimate the price could be to prolong the lease by an additional years. Identical flats in Axminster with an extended lease were in the region of £267,600. The mid-range ground rent payable was £65 collected yearly. The lease expiry date was in 2092. Given that there were 67 years unexpired we calculated the premium to the freeholder to extend the lease to be between £14,300 and £16,400 not including expenses.