Unfortunately that a Castle Bromwich residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Castle Bromwich property prices.Once your lease nears 85ish years, you need to 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 falls below eighty years - otherwise a higher premium will be due. Most leasehold owners in Castle Bromwich will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold premises in Castle Bromwich with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with handle Castle Bromwich 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.
Last year Ryan, came very near to the 80-year threshold with the lease on his studio flat in Castle Bromwich. In buying his flat two decades ago, the lease term was of no relevance. by good luck, he became aware that he would imminently be paying way over the odds for Extending the lease. Ryan extended the lease just under the wire in March. Ryan and the landlord who owned the flat above eventually settled on sum of £6,000 . If the lease had dropped to less than eighty years, the premium would have increased by a minimum £1,025.
Dr G Simon purchased a newly refurbished apartment in Castle Bromwich in May 1998. We are asked if we could approximate the price could be for a ninety year extension to my lease. Similar homes in Castle Bromwich with 100 year plus lease were valued about £290,000. The mid-range amount of ground rent was £45 collected yearly. The lease finished in 2098. Considering the 72 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £11,400 and £13,200 plus professional charges.
Dr Ellen Jones owned a ground floor apartment in Castle Bromwich in January 2009. We are asked if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Similar properties in Castle Bromwich with a long lease were valued about £233,200. The mid-range ground rent payable was £60 billed every twelve months. The lease lapsed in 2087. Given that there were 61 years outstanding we estimated the premium to the landlord to extend the lease to be between £22,800 and £26,400 exclusive of fees.