For anyone whose Birkenhead flat is held on a long lease, the message is clear – if nothing is done, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension.
Leasehold residencies in Birkenhead with in excess of 100 years remaining 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 situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
Lender | Requirement |
---|---|
Accord Mortgages | 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. |
Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
Halifax | Minimum 70 years from the date of the mortgage. |
Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Birkenhead 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.
In 2014 Cameron, started to get close to the 80-year threshold with the lease on his purpose- built flat in Birkenhead. Having bought his home two decades ago, the unexpired term was of minimal concern. Luckily, he recognised he needed to take steps soon on Extending the lease. Cameron extended the lease at the eleventh hour last September. Cameron and the freeholder ultimately agreed on the final figure of £5,500 . If the lease had dropped to less than eighty years, the price would have gone up by at least £975.
Last year we were contacted by Mr William Morgan , who bought a newly refurbished apartment in Birkenhead in November 2002. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Similar premises in Birkenhead with 100 year plus lease were valued around £181,600. The average amount of ground rent was £55 invoiced quarterly. The lease ended on 12 July 2076. Taking into account 52 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 plus expenses.
Last Autumn we were e-mailed by Dr L Ali , who purchased a ground floor apartment in Birkenhead in November 2008. The question was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Comparable properties in Birkenhead with 100 year plus lease were worth £290,000. The average ground rent payable was £45 billed annually. The lease elapsed in 2096. Considering the 72 years unexpired we estimated the premium to the landlord for the lease extension to be within £11,400 and £13,200 plus costs.