Unfortunately that a Fairford residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Fairford property market.Where your lease has approximately 90 years left, you should start considering 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 dips below eighty years - otherwise a higher amount will be due. Most flat owners in Fairford will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 handle Fairford 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 conveyancer we work with provide it.
Eli was the the leasehold owner of a 2 bedroom flat in Fairford being marketed with a lease of a few days over fifty eight years unexpired. Eli informally approached his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Eli to exercise his statutory right. Eli 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 Winter we were phoned by Mr and Mrs. A Miller , who purchased a studio flat in Fairford in March 2006. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparable residencies in Fairford with an extended lease were valued about £248,000. The average ground rent payable was £65 collected yearly. The lease ran out on 20 March 2089. Taking into account 63 years left we approximated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 exclusive of expenses.
Last month we were approach by Ms Y Turner , who was assigned a lease of a garden apartment in Fairford in January 1998. We are asked if we could estimate the price would be for a ninety year lease extension. Comparative properties in Fairford with a long lease were valued around £181,600. The mid-range amount of ground rent was £55 invoiced monthly. The lease concluded in 2078. Having 52 years outstanding we approximated the compensation to the landlord to extend the lease to be between £30,400 and £35,200 exclusive of fees.