Arnold 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 gets more expensive. The majority of owners of residential leasehold property in Arnold enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Arnold you would be well advised to investigate if your lease has between 70 and ninety years remaining. There are compelling reasons why a Arnold leaseholder with a lease having around 80 years unexpired should take steps to ensure that a lease extension is actioned without delay
Leasehold residencies in Arnold with more than 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| 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. |
| Godiva Mortgages | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancing solicitors that we work with handle Arnold 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 conveyancer we work with provide it.
Lucas owned a conversion flat in Arnold on the market with a lease of a few days over fifty eight years unexpired. Lucas on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £200 per annum. No ground rent would be due on a lease extension were Lucas to exercise his statutory right. Lucas procured expert legal guidance and secured satisfactory deal informally and ending up with a market value flat.
In 2009 we were phoned by Mr and Mrs. U Howard who, having purchased a ground floor apartment in Arnold in June 2009. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative homes in Arnold with an extended lease were valued about £250,400. The average ground rent payable was £65 collected yearly. The lease expired on 10 November 2090. Taking into account 64 years outstanding we estimated the premium to the landlord to extend the lease to be between £19,000 and £22,000 exclusive of fees.
Last Christmas we were e-mailed by Mr and Mrs. V King , who moved into a basement flat in Arnold in August 2005. We are asked if we could estimate the price could be for a ninety year extension to my lease. Similar flats in Arnold with an extended lease were worth £189,000. The mid-range ground rent payable was £55 invoiced quarterly. The lease lapsed on 19 May 2079. Taking into account 53 years remaining we estimated the premium to the landlord to extend the lease to be between £28,500 and £33,000 plus legals.