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Why you should start your Anlaby lease extension


Main reasons to commence your Anlaby lease extension today:

Increase your lease and increase your Anlaby property value

Anlaby leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Anlaby tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Anlaby you must investigate if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value

Anlaby property with a lease extension has roughly the same value as a freehold

It is generally considered that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.

Lending institutions will not issue a mortgage with a short lease

Mortgage companies are tightening their criteria and a meaningful number now want flats to have at least sixty if not seventy years remaining at the end of the mortgage. Considering plenty of flats in Anlaby were created in the fifties, sixties and seventies this means many now require lease extensions if they wish to obtain a mortgage.

Lender Requirement
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.
Coventry Building Society A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion.
Lloyds TSB Scotland Minimum 70 years from the date of the mortgage.
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 0.5% 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 0.5% 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 you become aware that it does not meet these requirements, please refer to the Issuing Office
Virgin 85 years at the time of completion. If it's less, we require it to be extended on or before completion.

Why use us for your lease extension in Anlaby?

The conveyancers that we work with handle Anlaby 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.

Anlaby Lease Extension Case Summaries:

Jennifer, Anlaby, East Yorkshire,

Off the back of unsuccessful discussions with the freeholder of her leasehold flat in Anlaby, Jennifer started the lease extension process as the eighty year deadline was fast advancing. The legal work completed in April 2014. The freeholder’s fees were restricted to about 650 pounds.

Anlaby case:

Last Autumn we were contacted by Dr Aimee Gray , who purchased a studio flat in Anlaby in May 1999. We are asked if we could estimate the price would be for a 90 year extension to my lease. Identical premises in Anlaby with an extended lease were worth £295,000. The mid-range amount of ground rent was £45 billed monthly. The lease elapsed on 28 September 2098. Given that there were 75 years left we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus legals.

Anlaby case:

In 2013 we were approached by Mr and Mrs. V Allen who, having completed a studio flat in Anlaby in February 2009. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by 90 years. Comparable residencies in Anlaby with 100 year plus lease were valued about £250,400. The mid-range amount of ground rent was £65 collected yearly. The lease elapsed on 21 March 2087. Taking into account 64 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 exclusive of costs.