For anyone whose Alston property is held on a long lease, our message is clear – if no remedial action is taken, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension.
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 conveyancing solicitors that we work with undertake Alston 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 lawyer we work with provide it.
Seth owned a high value apartment in Alston on the market with a lease of fraction over 59 years outstanding. Seth informally approached his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Seth to invoke his statutory right. Seth obtained expert advice and secured satisfactory deal without going to tribunal and readily saleable.
Mr and Mrs. W Roberts was assigned a lease of a first floor apartment in Alston in March 2006. The dilemma was if we could estimate the price could be to extend the lease by 90 years. Comparable flats in Alston with 100 year plus lease were in the region of £166,800. The mid-range ground rent payable was £50 invoiced annually. The lease terminated in 2075. Given that there were 50 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 not including legals.
Last year we were called by Mr Y Rodríguez , who owned a basement flat in Alston in February 2003. The dilemma was if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Identical residencies in Alston with a long lease were in the region of £280,000. The mid-range amount of ground rent was £45 billed quarterly. The lease terminated in 2095. Given that there were 70 years outstanding we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 not including fees.