Alford 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 your lease gets more expensive. Most owners of residential leasehold property in Alford enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Alford you should see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Alford with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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 conveyancers that we work with handle Alford 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.
Trailing protracted negotiations with the landlord of her first floor apartment in Alford, Gemma initiated the lease extension process as the 80 year threshold was quickly advancing. The lease extension was finalised in August 2007. The landlord’s fees were kept to an absolute minimum.
In 2013 we were called by Ms O Peterson who, having acquired a studio apartment in Alford in June 2008. The question was if we could estimate the premium would be for a 90 year extension to my lease. Identical residencies in Alford with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £55 invoiced monthly. The lease concluded on 16 April 2105. Given that there were 79 years unexpired we calculated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 plus fees.
Last Autumn we were contacted by Mr and Mrs. W Thomas , who took over the lease of a one bedroom flat in Alford in October 1999. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by 90 years. Identical residencies in Alford with 100 year plus lease were valued around £193,400. The mid-range amount of ground rent was £65 billed monthly. The lease lapsed in 2085. Given that there were 59 years left we estimated the premium to the landlord to extend the lease to be between £21,900 and £25,200 not including costs.