The closer a residential lease in Aylestone gets to zero years unexpired, the more it reduces the value of the property. If the residual term has, in excess of 125 years to run then this decrease may be fractional however there will become a point in time when a lease has less than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main rational as to why you should consider extending sooner as opposed to later. Most flat owners in Aylestone will meet the qualifying criteria; nevertheless a conveyancing solicitor can advise if you are eligible for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for less than two years.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Aylestone,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Aylestone valuers.
Jayden owned a conversion apartment in Aylestone being marketed with a lease of a little over 72 years unexpired. Jayden informally contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 per annum. No ground rent would be due on a lease extension were Jayden to exercise his statutory right. Jayden procured expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last September we were called by Ms Millie Bell , who took over the lease of a studio flat in Aylestone in August 2009. The dilemma was if we could estimate the premium could be for a ninety year lease extension. Identical residencies in Aylestone with an extended lease were valued around £270,000. The mid-range ground rent payable was £55 billed monthly. The lease ended in 2100. Given that there were 75 years remaining we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including expenses.
Mr and Mrs. D Torres moved into a ground floor flat in Aylestone in May 2012. The dilemma was if we could estimate the premium would be to prolong the lease by 90 years. Identical properties in Aylestone with an extended lease were worth £173,800. The average ground rent payable was £65 invoiced quarterly. The lease lapsed in 2080. Considering the 55 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 not including expenses.