The market value of a leasehold property in Alford depends on how many years the lease has remaining. If it is near to or fewer than 80 years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is ideal to start the lease extension process when a lease still has 82 years unexpired so that all matters can be addressed prior to the eighty year threshold. Current legislation entitles Alford qualifying lessees to obtain a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Alford with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors 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 lawyer we work with provide it.
In 2014 Jamie, came seriously close to the 80-year threshold with the lease on his studio flat in Alford. In buying his property 19 years previously, the lease term was of little significance. Fortunately, he realised he would soon be paying an inflated amount for Extending the lease. Jamie arranged for a lease extension at the eleventh hour last May. Jamie and the landlord who owned the flat above in the end agreed on an amount of £5,000 . If the lease had dipped to less than eighty years, the amount would have escalated by at least £975.
Dr Edward Cooper owned a first floor flat in Alford in October 1996. We are asked if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative premises in Alford with an extended lease were in the region of £242,600. The average amount of ground rent was £45 billed per annum. The lease concluded in 2093. Taking into account 67 years remaining we calculated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 exclusive of professional charges.
In 2011 we were approached by Mr and Mrs. D Thomas who, having took over the lease of a one bedroom apartment in Alford in January 2001. The dilemma was if we could shed any light on how much (roughly) premium would be for a 90 year extension to my lease. Similar properties in Alford with a long lease were valued around £280,000. The mid-range amount of ground rent was £55 billed per annum. The lease lapsed in 2104. Considering the 78 years unexpired we calculated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 not including costs.