Arley leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Arley residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Arley you must check if your lease has between seventy and 90 years remaining. There are good reasons why a Arley leaseholder with a lease having around 80 years left should take steps to ensure that a lease extension is effected without delay
It is generally accepted that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Arley,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Arley valuers.
Subsequent to unsuccessful correspondence with the landlord of her purpose-built flat in Arley, Stephanie initiated the lease extension process just as her lease was coming close to the all-important 80-year deadline. The lease extension completed in November 2013. The freeholder’s costs were kept to an absolute minimum.
Last Autumn we were called by Dr Rhiannon Jones , who purchased a studio apartment in Arley in September 2010. The question was if we could approximate the price could be to prolong the lease by ninety years. Comparable flats in Arley with an extended lease were worth £235,200. The mid-range amount of ground rent was £45 billed per annum. The lease concluded on 16 May 2092. Given that there were 66 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of legals.
Last year we were contacted by Mr I Wilson , who acquired a basement apartment in Arley in November 2006. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Comparative properties in Arley with an extended lease were in the region of £275,000. The mid-range ground rent payable was £55 invoiced quarterly. The lease came to a finish on 7 February 2103. Considering the 77 years left we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including legals.