Alrewas leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Alrewas residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Alrewas you should check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is generally considered that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 Alrewas 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.
In recent months Jacob, came dangerously close to the 80-year threshold with the lease on his one bedroom flat in Alrewas. Having bought his home two decades ago, the length of the lease was of little relevance. As luck would have it, it dawned on him that he would imminently be paying way over the odds for Extending the lease. Jacob extended the lease just under the wire in March. Jacob and the landlord subsequently agreed on a premium of £6,000 . If the lease had descended below eighty years, the amount would have gone up by at least £1,025.
Ms P Walker bought a purpose-built apartment in Alrewas in May 1999. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by an additional years. Identical residencies in Alrewas with a long lease were valued around £233,200. The mid-range ground rent payable was £60 invoiced every twelve months. The lease finished on 26 March 2087. Given that there were 61 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £22,800 and £26,400 not including professional charges.
Mr and Mrs. T Martínez bought a studio apartment in Alrewas in January 2008. The dilemma was if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Comparative homes in Alrewas with 100 year plus lease were worth £171,800. The mid-range amount of ground rent was £55 collected yearly. The lease end date was in 2076. Having 50 years left we calculated the compensation to the freeholder to extend the lease to be between £33,300 and £38,400 exclusive of fees.