For those whose Alderley Edge home is held on a long lease, our message is clear – if you do nothing, the property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Alderley Edge 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.
Elijah was the the leasehold proprietor of a studio apartment in Alderley Edge being marketed with a lease of a little over 61 years outstanding. Elijah informally contacted his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £200 annually. Ordinarily, ground rent would not be due on a lease extension were Elijah to exercise his statutory right. Elijah obtained expert advice and secured an acceptable deal informally and sell the property.
Mr and Mrs. J Rose completed a studio apartment in Alderley Edge in September 2002. The question was if we could estimate the price would likely be for a 90 year lease extension. Comparable premises in Alderley Edge with an extended lease were worth £246,800. The mid-range amount of ground rent was £60 invoiced per annum. The lease ran out on 20 March 2076. Considering the 50 years as a residual term we estimated the premium to the landlord to extend the lease to be between £44,700 and £51,600 plus professional charges.
Last Christmas we were phoned by Mr and Mrs. J Bonnet , who owned a one bedroom flat in Alderley Edge in May 2007. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by an additional years. Similar premises in Alderley Edge with an extended lease were valued around £203,200. The mid-range amount of ground rent was £65 collected per annum. The lease terminated on 14 July 2087. Taking into account 61 years outstanding we calculated the compensation to the landlord to extend the lease to be between £19,000 and £22,000 not including expenses.