Unfortunately that a Fairford residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Fairford property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher premium will be due. The majority of flat owners in Fairford will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the premises will be equivalent in value to 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you increased control over the value of your Fairford leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas Ben, came perilously near to the 80-year mark with the lease on his one bedroom flat in Fairford. Having bought his flat two decades ago, the unexpired term was of no concern. Fortunately, he realised he needed to take steps soon on Extending the lease. Ben was able to extend his lease just under the wire last July. Ben and the landlord subsequently settled on a premium of £5,000 . If he not met the deadline, the price would have escalated by at least £1,075.
In 2012 we were called by Mr and Mrs. V Alexander who, having purchased a first floor apartment in Fairford in August 2010. The dilemma was if we could shed any light on how much (approximately) premium could be for a ninety year extension to my lease. Similar premises in Fairford with 100 year plus lease were worth £295,000. The average amount of ground rent was £45 billed every twelve months. The lease ran out in 2099. Taking into account 74 years as a residual term we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus expenses.
Last Christmas we were called by Mr and Mrs. M Girard , who completed a one bedroom flat in Fairford in July 2008. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Identical flats in Fairford with an extended lease were valued around £248,000. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease ran out on 21 April 2088. Considering the 63 years unexpired we calculated the premium to the landlord to extend the lease to be between £20,000 and £23,000 exclusive of legals.