For anyone whose Alcester home is held on a long lease, the message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
Leasehold premises in Alcester with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Lease extensions in Alcester can be a difficult process. We recommend you secure guidance from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Alcester lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
James was the the leasehold owner of a 2 bedroom flat in Alcester being sold with a lease of a few days over 61 years unexpired. James informally contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were James to invoke his statutory right. James procured expert advice and secured satisfactory deal informally and sell the property.
Mr Tyler Williams acquired a garden flat in Alcester in October 2000. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Comparable residencies in Alcester with 100 year plus lease were valued about £218,000. The average amount of ground rent was £45 billed every twelve months. The lease concluded in 2088. Given that there were 63 years remaining we estimated the premium to the landlord for the lease extension to be within £17,100 and £19,800 not including costs.
In 2011 we were e-mailed by Dr William Lefebvre who, having took over the lease of a ground floor flat in Alcester in March 1996. We are asked if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Comparable properties in Alcester with 100 year plus lease were in the region of £270,000. The average ground rent payable was £55 billed yearly. The lease ended on 7 July 2099. Having 74 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus expenses.