Acocks Green leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Acocks Green tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Acocks Green you should investigate if your lease has between 70 and 90 years left. There are compelling reasons why a Acocks Green flat owner with a lease having around 80 years remaining should take action to ensure that a lease extension is effected without delay
It is generally considered that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as 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. |
| 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; |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you better control over the value of your Acocks Green leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Joseph was the the leasehold proprietor of a 2 bedroom flat in Acocks Green being sold with a lease of a few days over sixty years remaining. Joseph informally spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 yearly. No ground rent would be due on a lease extension were Joseph to invoke his statutory right. Joseph obtained expert advice and secured satisfactory resolution without resorting to tribunal and readily saleable.
In 2009 we were e-mailed by Dr Sarah Torres who, having bought a studio flat in Acocks Green in May 2007. The dilemma was if we could approximate the price would be to extend the lease by a further 90 years. Comparative flats in Acocks Green with an extended lease were worth £290,000. The mid-range amount of ground rent was £60 invoiced annually. The lease termination date was on 26 August 2105. Given that there were 80 years outstanding we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including legals.
Dr I Green purchased a one bedroom flat in Acocks Green in February 1997. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Identical properties in Acocks Green with an extended lease were worth £200,800. The mid-range ground rent payable was £65 billed yearly. The lease ran out on 26 September 2085. Given that there were 60 years as a residual term we approximated the premium to the landlord for the lease extension to be within £20,900 and £24,200 exclusive of professional charges.