With a residential leasehold premises in Ladywood, you are in fact renting it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than eighty years remaining. Leasehold owners in Ladywood with a lease drawing near to 81 years unexpired should seriously consider extending it sooner than later. Once the lease term has below eighty years remaining, under the current legislation the freeholder is entitled to calculate and levy a larger amount, based on a technical computation, known as “marriage value” which is due.
Leasehold premises in Ladywood with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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 lawyers that we work with undertake Ladywood 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.
Oscar owned a high value apartment in Ladywood on the market with a lease of a few days over 61 years remaining. Oscar on an informal basis contacted his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. No ground rent would be due on a lease extension were Oscar to exercise his statutory right. Oscar obtained expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
In 2010 we were e-mailed by Dr Jacob Johnson who, having purchased a basement apartment in Ladywood in April 2003. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Similar homes in Ladywood with a long lease were in the region of £173,800. The average ground rent payable was £60 billed monthly. The lease ended in 2079. Having 55 years left we calculated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 plus expenses.
In 2012 we were called by Mr and Mrs. E Lefebvre who, having took over the lease of a purpose-built flat in Ladywood in July 1997. The dilemma was if we could estimate the price would likely be to prolong the lease by ninety years. Identical homes in Ladywood with 100 year plus lease were worth £235,200. The mid-range ground rent payable was £45 collected quarterly. The lease expired in 2090. Taking into account 66 years remaining we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus costs.