Unfortunately that a Ladywood 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 early years due to the deflation being disguised by increases in the Ladywood property prices.Where your lease has approximately ninety years left, you should start considering a lease extension. If lease term drops below eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Ladywood will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Chelsea 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. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Regardless of whether you are a tenant or a freeholder in Ladywood,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Ladywood valuers.
Rory owned a conversion apartment in Ladywood being sold with a lease of a few days over fifty eight years remaining. Rory on an informal basis spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Rory to exercise his statutory right. Rory obtained expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Mr K Morgan was assigned a lease of a one bedroom flat in Ladywood in July 2009. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Comparable homes in Ladywood with 100 year plus lease were in the region of £260,000. The average ground rent payable was £50 invoiced monthly. The lease concluded in 2098. Given that there were 72 years remaining we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.
Mr and Mrs. O García bought a recently refurbished apartment in Ladywood in September 2001. The question was if we could shed any light on how much (approximately) price could be for a ninety year extension to my lease. Identical residencies in Ladywood with an extended lease were worth £256,600. The average amount of ground rent was £60 collected yearly. The lease lapsed on 24 January 2078. Given that there were 52 years left we approximated the compensation to the landlord to extend the lease to be between £39,000 and £45,000 not including legals.