Acrefair 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 the lease gets more expensive. The majority of owners of residential leasehold property in Acrefair enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Acrefair you really ought to check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Acrefair with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Acrefair,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Acrefair valuers.
Trailing protracted discussions with the landlord of her one bedroom flat in Acrefair, Jessica initiated the lease extension process as the eighty year threshold was fast nearing. The transaction was concluded in October 2013. The landlord’s charges were kept to an absolute minimum.
In 2009 we were called by Dr V Roberts who, having owned a garden apartment in Acrefair in September 2005. The question was if we could approximate the price could be for a 90 year extension to my lease. Comparable residencies in Acrefair with 100 year plus lease were in the region of £168,800. The mid-range amount of ground rent was £60 billed yearly. The lease elapsed on 25 March 2081. Taking into account 55 years unexpired we approximated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 plus fees.
Dr H Leroy bought a one bedroom flat in Acrefair in July 1996. We are asked if we could estimate the premium would likely be to prolong the lease by a further 90 years. Comparable homes in Acrefair with a long lease were worth £235,200. The mid-range ground rent payable was £45 billed quarterly. The lease lapsed on 27 April 2092. Taking into account 66 years outstanding we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.