Unfortunately that a Alston residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Alston property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls under eighty years - otherwise a higher amount will be payable. The majority of leasehold owners in Alston will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle 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 conveyancing solicitor we work with provide it.
After lengthy negotiations with the landlord of her ground floor flat in Alston, Francesca started the lease extension process as the eighty year threshold was swiftly coming. The legal work completed in May 2011. The freeholder’s charges were kept to an absolute minimum.
Last year we were approach by Mr Matthew Rodríguez , who owned a garden flat in Alston in July 2000. We are asked if we could approximate the price would be to extend the lease by a further 90 years. Comparative flats in Alston with an extended lease were in the region of £295,000. The average ground rent payable was £45 invoiced monthly. The lease came to a finish in 2100. Given that there were 74 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
Last Autumn we were called by Mr and Mrs. D Green , who took over the lease of a basement flat in Alston in June 1999. The question was if we could shed any light on how much (roughly) price could be to extend the lease by ninety years. Identical properties in Alston with an extended lease were worth £243,000. The average amount of ground rent was £65 invoiced yearly. The lease terminated in 2089. Taking into account 63 years unexpired we estimated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 exclusive of professional charges.