Alvechurch leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Alvechurch residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Alvechurch you really ought to check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for decades to come.
| 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; |
| Halifax | Minimum 70 years from the date 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. |
Regardless of whether you are a tenant or a freeholder in Alvechurch,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Alvechurch valuers.
Kyle owned a high value flat in Alvechurch being marketed with a lease of fraction over fifty eight years left. Kyle informally contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Kyle to invoke his statutory right. Kyle obtained expert legal guidance and was able to make an informed decision and deal with the matter and sell the property.
Last Autumn we were phoned by Ms Aimee Peterson , who purchased a one bedroom flat in Alvechurch in April 2001. The dilemma was if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Similar homes in Alvechurch with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £55 collected monthly. The lease finished on 21 July 2101. Considering the 76 years outstanding we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.
In 2013 we were called by Mr and Mrs. J Leroy who, having moved into a first floor apartment in Alvechurch in February 2005. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable properties in Alvechurch with 100 year plus lease were valued about £176,200. The average ground rent payable was £65 collected yearly. The lease lapsed on 4 August 2081. Having 56 years outstanding we approximated the compensation to the landlord for the lease extension to be within £29,500 and £34,000 plus legals.