The rule of thumb is, all other factors being equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Alford may extend the lease for a further 90 years in accordance with statute. Do think carefully before delaying your Alford lease extension. Postponing the costs now simply escalates the amount you will ultimately have to pay to extend the lease.
It is generally accepted that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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 lawyers 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.
Milo was the the leasehold proprietor of a studio apartment in Alford on the market with a lease of just over sixty years unexpired. Milo on an informal basis approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 yearly. No ground rent would be due on a lease extension were Milo to exercise his statutory right. Milo obtained expert legal guidance and was able to make an informed judgement and handle with the matter and sell the property.
Mr Liam Pérez moved into a first floor flat in Alford in February 2009. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Identical homes in Alford with an extended lease were in the region of £200,800. The mid-range ground rent payable was £65 billed monthly. The lease ended in 2085. Taking into account 60 years left we estimated the compensation to the landlord to extend the lease to be within £20,900 and £24,200 not including fees.
Mr and Mrs. K Cooper moved into a garden apartment in Alford in April 1997. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative residencies in Alford with a long lease were in the region of £255,000. The average ground rent payable was £50 collected monthly. The lease terminated on 12 November 2096. Having 71 years left we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus expenses.