For those whose Rednal property is held on a long lease, the message is clear – if you ignore the situation, your property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a property with over 100 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 |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Rednal 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 conveyancing solicitor we work with provide it.
In 2014 Kyle, came dangerously near to the 80-year mark with the lease on his one bedroom apartment in Rednal. In buying his flat two decades ago, the unexpired term was of no interest. by good luck, it dawned on him that he needed to take steps soon on Extending the lease. Kyle extended the lease at the eleventh hour in July. Kyle and the landlord subsequently settled on the final figure of £6,000 . If the lease had fallen to less than 80 years, the price would have become more costly by at least £950.
In 2010 we were contacted by Mrs J Anderson who, having bought a basement apartment in Rednal in October 2010. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Comparative residencies in Rednal with an extended lease were in the region of £171,800. The average amount of ground rent was £55 billed yearly. The lease lapsed in 2074. Considering the 50 years remaining we calculated the compensation to the freeholder for the lease extension to be between £33,300 and £38,400 exclusive of fees.
Last Christmas we were e-mailed by Mrs C Campbell , who purchased a garden flat in Rednal in August 2009. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a 90 year lease extension. Comparative flats in Rednal with a long lease were in the region of £280,000. The average amount of ground rent was £45 invoiced monthly. The lease concluded on 3 February 2094. Given that there were 70 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of professional charges.