Allenton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Allenton tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Allenton you would be well advised to check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold premises in Allenton with over 100 years outstanding 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 upside in purchasing the reversionary interest unless savings on ground rent and service 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Engaging our service will provide you increased control over the value of your Allenton leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Spring Jack, came precariously close to the 80-year mark with the lease on his one bedroom apartment in Allenton. Having purchased his property two decades ago, the unexpired term was of little concern. Fortunately, it dawned on him that he would soon be paying way over the odds for Extending the lease. Jack extended the lease just under the wire last March. Jack and the landlord who owned the flat above in the end settled on a premium of £5,000 . If the lease had dipped below eighty years, the price would have become more costly by at least £1,025.
In 2012 we were e-mailed by Ms Melissa King who, having was assigned a lease of a one bedroom apartment in Allenton in October 2011. We are asked if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Comparative homes in Allenton with 100 year plus lease were worth £171,800. The average ground rent payable was £55 collected yearly. The lease finished on 5 January 2075. Considering the 50 years as a residual term we estimated the premium to the landlord to extend the lease to be within £33,300 and £38,400 plus professional charges.
In 2013 we were called by Mr and Mrs. J Kelly who, having completed a one bedroom flat in Allenton in August 2003. We are asked if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Similar premises in Allenton with 100 year plus lease were valued around £280,000. The average amount of ground rent was £45 collected monthly. The lease terminated on 23 May 2095. Given that there were 70 years left we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of costs.