Alford leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Alford tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Alford you really ought to investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold residencies in Alford 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 home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Alford,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 Alford valuers.
Finley was the the leasehold proprietor of a conversion flat in Alford on the market with a lease of just over 72 years remaining. Finley informally contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Finley to invoke his statutory right. Finley obtained expert advice and secured satisfactory deal without going to tribunal and ending up with a market value flat.
Mr and Mrs. P Flores purchased a recently refurbished flat in Alford in November 2000. The dilemma was if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparative properties in Alford with an extended lease were in the region of £227,800. The mid-range amount of ground rent was £45 collected annually. The lease expiry date was in 2090. Having 65 years remaining we estimated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 not including fees.
Last Autumn we were e-mailed by Dr Leon Campbell , who took over the lease of a recently refurbished flat in Alford in February 2009. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by an additional years. Comparative residencies in Alford with 100 year plus lease were in the region of £275,000. The average ground rent payable was £55 invoiced annually. The lease lapsed on 28 May 2101. Considering the 76 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus legals.