If you are facing a significant premium because your lease in Alvaston has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Why you should start your Alvaston lease extension today:
A Alvaston lease depreciates with the years remaining on the lease.
As the length of the unexpired term of a Alvaston domestic lease diminished so does its value and therefore the value of your property. Where the residual term has, beyond one hundred years to run then this decrease may be fractional that being said there will become a point in time when a lease has under than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should consider extending sooner rather than later. The majority of flat owners in Alvaston will qualify for this right; nevertheless a conveyancer can advise if you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
An extended lease is almost the same value as a freehold
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the residence will be worth the same as a freehold for decades to come.
Lenders may not grant a mortgage on a short lease
Banks and building societies do not like short residential leases. You are likely to experience difficulties if you wish to sell your flat in Alvaston if the remaining term of your lease is below the criteria set by the majority of lenders. Different mortgage companies have different requirements but in the main theyrequire a minimum remaining lease term of seventy years.
| Lender |
Requirement
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|---|
| Birmingham Midshires |
Minimum 70 years from the date of the mortgage.
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| Halifax |
Minimum 70 years from the date of the mortgage.
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| 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
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
| Virgin |
85 years at the time of completion. If it's less, we require it to be extended on or before completion.
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Get in touch with one of our Alvaston lease extension solicitors or enfranchisement solicitors
Engaging our service gives you better control over the value of your Alvaston leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell.
The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Alvaston Lease Extension Case Studies:
James, Alvaston, Derbyshire,
James owned a high value apartment in Alvaston being sold with a lease of a few days over sixty years left. James on an informal basis contacted his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were James to exercise his statutory right. James procured expert advice and was able to make an informed judgement and handle with the matter and sell the property.
Alvaston case:
In 2012 we were contacted by Mr C Lefebvre who, having was assigned a lease of a basement apartment in Alvaston in April 2011. We are asked if we could estimate the price would be to extend the lease by ninety years. Comparative flats in Alvaston with 100 year plus lease were valued about £206,200. The mid-range ground rent payable was £60 collected per annum. The lease expiry date was in 2082. Given that there were 56 years left we estimated the premium to the landlord to extend the lease to be within £31,400 and £36,200 plus fees.
Alvaston case:
Mr and Mrs. U Reed owned a first floor flat in Alvaston in July 2009. The dilemma was if we could estimate the premium could be for a 90 year extension to my lease. Similar flats in Alvaston with 100 year plus lease were in the region of £300,000. The average ground rent payable was £50 billed per annum. The lease lapsed on 28 July 2102. Having 76 years outstanding we estimated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of expenses.