Alcester leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Most owners of residential leasehold property in Alcester enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Alcester you would be well advised to investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Alcester,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Alcester valuers.
Jasper owned a 2 bedroom apartment in Alcester being sold with a lease of a few days over 72 years left. Jasper on an informal basis contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 yearly. No ground rent would be payable on a lease extension were Jasper to invoke his statutory right. Jasper procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
In 2011 we were approached by Mrs Grace Rodríguez who, having completed a one bedroom apartment in Alcester in June 1999. The question was if we could estimate the price would be to extend the lease by 90 years. Identical properties in Alcester with a long lease were valued about £166,400. The mid-range ground rent payable was £60 billed quarterly. The lease lapsed in 2080. Taking into account 54 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 exclusive of fees.
Mr Alexander Watson was assigned a lease of a basement flat in Alcester in September 1997. We are asked if we could approximate the compensation to the landlord would be to extend the lease by 90 years. Identical homes in Alcester with an extended lease were valued around £232,800. The mid-range ground rent payable was £45 collected every twelve months. The lease expired in 2091. Given that there were 65 years outstanding we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including expenses.