It’s a harsh certainty that a Acocks Green residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Acocks Green property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than 80 years - otherwise a higher amount will be payable. The majority of flat owners in Acocks Green will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold residencies in Acocks Green with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| 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 are not acceptable. 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure Acocks Green 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.
Last October Hunter, started to get near to the 80-year mark with the lease on his ground floor flat in Acocks Green. In buying his property two decades ago, the length of the lease was of little bearing. As luck would have it, it dawned on him that he needed to take action soon on Extending the lease. Hunter arranged for a lease extension just ahead of time last March. Hunter and the landlord who owned the flat above in the end agreed on an amount of £5,000 . If he had missed the deadline, the figure would have gone up by a minimum £950.
In 2013 we were e-mailed by Mr and Mrs. K Patel who, having was assigned a lease of a one bedroom flat in Acocks Green in February 2004. The question was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Identical residencies in Acocks Green with a long lease were worth £254,200. The average amount of ground rent was £60 billed annually. The lease lapsed on 3 November 2077. Given that there were 51 years outstanding we calculated the compensation to the landlord to extend the lease to be between £43,700 and £50,600 exclusive of professional charges.
Dr Stanley Girard acquired a one bedroom apartment in Acocks Green in February 2007. The question was if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparative premises in Acocks Green with 100 year plus lease were valued around £210,600. The mid-range ground rent payable was £45 billed per annum. The lease ended in 2088. Taking into account 62 years left we calculated the premium to the landlord for the lease extension to be within £18,100 and £20,800 exclusive of costs.