It’s a harsh truth that a Acocks Green residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Acocks Green property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below 80 years - otherwise a higher amount will be due. Most flat owners in Acocks Green will be able to extend under the legislation; however a conveyancer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold properties in Acocks Green with more than one hundred years outstanding on the lease are often referred to as ‘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 freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start 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. |
The conveyancing solicitors that we work with handle Acocks Green 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.
In the wake of eight months of protracted negotiations with the freeholder of her purpose-built flat in Acocks Green, Ellen initiated the lease extension process just as her lease was nearing the crucial 80-year deadline. The legal work was concluded in August 2008. The freeholder’s costs were negotiated to below 700 pounds.
In 2010 we were contacted by Dr Amy Johnson who, having acquired a garden flat in Acocks Green in April 1997. The dilemma was if we could estimate the premium would be to extend the lease by 90 years. Comparative properties in Acocks Green with a long lease were in the region of £280,000. The mid-range ground rent payable was £55 billed monthly. The lease terminated in 2102. Considering the 77 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of professional charges.
Dr P Howard completed a recently refurbished flat in Acocks Green in June 1998. We are asked if we could shed any light on how much (roughly) price would likely be for a 90 year extension to my lease. Comparative premises in Acocks Green with an extended lease were valued about £183,600. The mid-range amount of ground rent was £65 billed yearly. The lease ended on 20 October 2082. Taking into account 57 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 plus legals.