The market value of Alton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase substantially once the remaining term is less than 80 years
It is generally accepted that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 undertake Alton 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.
Trailing unsuccessful negotiations with the landlord of her garden flat in Alton, Katherine started the lease extension process just as the lease was approaching the critical 80-year mark. The legal work was concluded in February 2006. The landlord’s fees were negotiated to approximately 500 pounds.
Dr V Green purchased a one bedroom flat in Alton in November 2001. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparative homes in Alton with an extended lease were valued about £173,800. The mid-range amount of ground rent was £65 billed per annum. The lease expiry date was on 6 April 2080. Considering the 55 years outstanding we calculated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 plus expenses.
In 2014 we were approached by Mr and Mrs. Y Turner who, having acquired a recently refurbished apartment in Alton in March 2006. We are asked if we could estimate the price could be to extend the lease by an additional years. Comparable properties in Alton with an extended lease were in the region of £235,200. The average amount of ground rent was £45 billed monthly. The lease terminated on 16 September 2091. Considering the 66 years left we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including professional charges.