With a residential leasehold property in Alrewas, you effectively rent it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than eighty years left. Leasehold owners in Alrewas with a lease nearing 81 years remaining should seriously think of extending it without delay. Once a lease has below 80 years outstanding, under the current Act the freeholder is entitled to calculate and demand a greater amount, assessed on a technical calculation, strangely termed as “marriage value” which is due.
Leasehold residencies in Alrewas with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth 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 merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Chelsea 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Alrewas leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Andrew was the the leasehold owner of a conversion flat in Alrewas being sold with a lease of just over 61 years remaining. Andrew informally spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Andrew to exercise his statutory right. Andrew procured expert legal guidance and secured satisfactory resolution informally and sell the flat.
In 2014 we were called by Mr and Mrs. T David who, having was assigned a lease of a purpose-built flat in Alrewas in August 2008. The question was if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparative properties in Alrewas with an extended lease were valued around £243,000. The average amount of ground rent was £65 collected quarterly. The lease ended on 24 May 2089. Having 63 years as a residual term we calculated the premium to the landlord for the lease extension to be between £20,000 and £23,000 not including costs.
In 2010 we were called by Mrs G François who, having completed a recently refurbished apartment in Alrewas in June 2001. The question was if we could estimate the premium would be for a ninety year extension to my lease. Identical residencies in Alrewas with a long lease were in the region of £181,600. The average amount of ground rent was £55 collected yearly. The lease terminated in 2078. Having 52 years left we calculated the premium to the landlord for the lease extension to be within £30,400 and £35,200 plus professional charges.