Alvechurch leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Alvechurch residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Alvechurch you must investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Alvechurch 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.
Half a year ago Lucas, started to get near to the 80-year threshold with the lease on his ground floor flat in Alvechurch. Having bought his flat 18 years ago, the length of the lease was of minimal significance. by good luck, he recognised he needed to take action soon on a lease extension. Lucas was able to extend his lease just in the nick of time last April. Lucas and the landlord subsequently settled on the final figure of £5,000 . If he not met the deadline, the sum would have escalated by a minimum £975.
Last month we were phoned by Mr and Mrs. U González , who moved into a one bedroom flat in Alvechurch in March 2003. The question was if we could estimate the premium would likely be to extend the lease by an additional years. Comparable properties in Alvechurch with a long lease were valued about £280,000. The mid-range amount of ground rent was £55 billed monthly. The lease came to a finish on 10 October 2104. Taking into account 78 years unexpired we approximated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 not including fees.
In 2010 we were contacted by Mrs N Dupont who, having acquired a recently refurbished flat in Alvechurch in January 1998. We are asked if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Identical residencies in Alvechurch with an extended lease were valued around £191,000. The average ground rent payable was £65 invoiced quarterly. The lease expired in 2084. Taking into account 58 years left we calculated the premium to the landlord to extend the lease to be within £23,800 and £27,400 exclusive of fees.