Rednal leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Rednal tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Rednal you must investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold residencies in Rednal with over 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 lawyer we work with provide it.
Two years ago Connor, came precariously close to the eighty-year threshold with the lease on his first floor apartment in Rednal. In buying his flat two decades ago, the lease term was of no interest. As luck would have it, it dawned on him that he needed to take action soon on a lease extension. Connor arranged for a lease extension at the eleventh hour last May. Connor and the freeholder via the management company in the end agreed on an amount of £6,000 . If he had missed the deadline, the price would have escalated by at least £975.
Last Autumn we were contacted by Mr and Mrs. D Lefèvre , who bought a basement flat in Rednal in September 2002. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Identical homes in Rednal with 100 year plus lease were valued around £260,200. The average ground rent payable was £65 billed annually. The lease elapsed on 11 October 2091. Considering the 66 years remaining we calculated the premium to the landlord for the lease extension to be between £16,200 and £18,600 not including legals.
In 2011 we were e-mailed by Mr V Thompson who, having was assigned a lease of a basement flat in Rednal in March 2009. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by 90 years. Comparable flats in Rednal with a long lease were in the region of £198,800. The mid-range amount of ground rent was £55 collected per annum. The lease expired on 12 September 2080. Considering the 55 years left we estimated the premium to the freeholder to extend the lease to be within £33,300 and £38,400 plus costs.