Altrincham leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Altrincham tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Altrincham you really ought to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Altrincham with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| Chelsea 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. |
| 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. |
| 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. |
The lawyers that we work with undertake Altrincham 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.
Subsequent to protracted negotiations with the landlord of her garden flat in Altrincham, Sarah started the lease extension process just as her lease was coming close to the crucial 80-year mark. The transaction was finalised in March 2011. The landlord’s charges were kept to an absolute minimum.
Last Spring we were e-mailed by Dr B Stewart , who took over the lease of a garden apartment in Altrincham in September 1999. The question was if we could approximate the premium could be for a ninety year extension to my lease. Comparative homes in Altrincham with 100 year plus lease were in the region of £257,800. The average ground rent payable was £65 invoiced yearly. The lease came to a finish on 15 April 2090. Considering the 65 years unexpired we estimated the premium to the freeholder to extend the lease to be within £18,100 and £20,800 exclusive of fees.
In 2010 we were e-mailed by Mr and Mrs. R Roberts who, having moved into a basement apartment in Altrincham in August 1996. We are asked if we could estimate the price could be to extend the lease by 90 years. Similar homes in Altrincham with an extended lease were worth £196,400. The average amount of ground rent was £55 invoiced monthly. The lease concluded in 2079. Taking into account 54 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £35,200 and £40,600 exclusive of costs.