On the balance of probabilities where you own a flat in Handsworth you actually own a long leasehold interest over your property
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire Building Society | 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. |
The conveyancing solicitors that we work with undertake Handsworth 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.
Gabriel owned a 2 bedroom apartment in Handsworth being marketed with a lease of fraction over sixty years left. Gabriel informally spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Gabriel to invoke his statutory right. Gabriel procured expert legal guidance and secured satisfactory resolution without resorting to tribunal and sell the property.
In 2010 we were called by Mr Alexander Díaz who, having moved into a ground floor apartment in Handsworth in January 1997. We are asked if we could approximate the premium could be for a 90 year lease extension. Similar premises in Handsworth with 100 year plus lease were worth £181,600. The average ground rent payable was £55 collected per annum. The lease ended in 2077. Having 52 years unexpired we approximated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 plus costs.
In 2011 we were called by Mr and Mrs. W Roberts who, having completed a first floor flat in Handsworth in May 2007. We are asked if we could shed any light on how much (approximately) price could be to extend the lease by ninety years. Comparable residencies in Handsworth with a long lease were worth £285,000. The mid-range ground rent payable was £45 collected yearly. The lease end date was in 2097. Considering the 72 years unexpired we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of fees.