Arlesey leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Arlesey tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Arlesey you must investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold premises in Arlesey with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
The conveyancers that we work with undertake Arlesey 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 conveyancing solicitor we work with provide it.
Hugo was the the leasehold owner of a studio flat in Arlesey on the market with a lease of fraction over 59 years remaining. Hugo on an informal basis approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Hugo to exercise his statutory right. Hugo procured expert legal guidance and secured satisfactory deal without resorting to tribunal and readily saleable.
In 2013 we were called by Mrs G Smith who, having moved into a one bedroom apartment in Arlesey in May 1996. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Similar flats in Arlesey with a long lease were worth £191,000. The average ground rent payable was £65 billed annually. The lease ended on 5 August 2084. Considering the 58 years outstanding we calculated the premium to the freeholder for the lease extension to be within £23,800 and £27,400 plus costs.
In 2012 we were contacted by Mr and Mrs. M Hall who, having acquired a purpose-built apartment in Arlesey in May 2002. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year lease extension. Identical properties in Arlesey with 100 year plus lease were valued around £250,000. The mid-range amount of ground rent was £50 invoiced annually. The lease finished in 2095. Having 69 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of expenses.