It’s a harsh truth that a Alrewas residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Alrewas property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term slips under 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Alrewas will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the process.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service gives you better control over the value of your Alrewas leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Felix, started to get near to the 80-year mark with the lease on his ground floor flat in Alrewas. Having bought his flat two decades ago, the lease term was of minimal significance. Fortunately, it dawned on him that he would soon be paying way over the odds for a lease extension. Felix was able to extend his lease just under the wire in April. Felix and the landlord subsequently settled on an amount of £5,500 . If the lease had descended below 80 years, the sum would have gone up by a minimum £1,000.
Dr W Simon acquired a purpose-built apartment in Alrewas in January 2009. We are asked if we could estimate the premium would be to prolong the lease by 90 years. Similar homes in Alrewas with 100 year plus lease were worth £216,000. The average amount of ground rent was £60 invoiced every twelve months. The lease elapsed in 2083. Considering the 58 years left we estimated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 plus expenses.
Last Christmas we were approach by Mr and Mrs. J Mitchell , who bought a one bedroom apartment in Alrewas in July 2007. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Similar premises in Alrewas with 100 year plus lease were valued around £200,000. The average amount of ground rent was £50 billed quarterly. The lease came to a finish on 23 April 2103. Having 78 years remaining we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.