It’s a harsh truth that a Fallowfield residential lease is a deteriorating 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 loss of value being disguised by increases in the Fallowfield property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term falls under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Fallowfield will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold properties in Fallowfield with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Fallowfield 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 the wake of eight months of lengthy correspondence with the freeholder of her basement flat in Fallowfield, Rebecca initiated the lease extension process just as the lease was nearing the all-important eighty-year threshold. The lease extension was concluded in August 2011. The landlord’s charges were restricted to less than 600 GBP.
Last Autumn we were contacted by Mr Callum Evans , who bought a one bedroom flat in Fallowfield in April 2006. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Comparative properties in Fallowfield with an extended lease were valued about £280,000. The average ground rent payable was £55 collected monthly. The lease ended on 14 July 2104. Given that there were 79 years remaining we calculated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of legals.
In 2010 we were contacted by Dr Ellen Bennett who, having owned a basement flat in Fallowfield in January 2002. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Similar properties in Fallowfield with an extended lease were in the region of £193,400. The mid-range ground rent payable was £65 invoiced yearly. The lease ran out in 2084. Taking into account 59 years remaining we approximated the premium to the landlord to extend the lease to be between £21,900 and £25,200 exclusive of fees.