For anyone whose Alresford property is held on a long lease, the message is clear – if you do nothing, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension.
Leasehold properties in Alresford with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Alresford 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 conveyancer we work with provide it.
Two years ago Alex, came seriously near to the eighty-year threshold with the lease on his purpose- built apartment in Alresford. Having purchased his home 19 years ago, the length of the lease was of minimal significance. Thankfully, he noticed he needed to take action soon on Extending the lease. Alex extended the lease just ahead of time last May. Alex and the landlord who owned the flat above in the end agreed on the final figure of £5,500 . If he failed to meet the deadline, the sum would have become more exhorbitant by at least £1,075.
In 2009 we were e-mailed by Ms K Young who, having moved into a ground floor apartment in Alresford in September 1996. We are asked if we could shed any light on how much (roughly) premium would be to extend the lease by a further 90 years. Comparative premises in Alresford with 100 year plus lease were worth £166,800. The average ground rent payable was £50 billed annually. The lease end date was on 18 August 2076. Considering the 50 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 exclusive of fees.
Mr and Mrs. M Collins took over the lease of a studio apartment in Alresford in May 1998. We are asked if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Identical premises in Alresford with 100 year plus lease were in the region of £280,000. The average ground rent payable was £45 collected monthly. The lease expired on 5 September 2096. Taking into account 70 years remaining we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus costs.