It’s a harsh certainty that a Balsall Common residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Balsall Common property market.Where your lease has approximately ninety years left, you should start considering a lease extension. If lease term dips below eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most leasehold owners in Balsall Common will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the process.
Leasehold residencies in Balsall Common with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify 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. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancing solicitors that we work with undertake Balsall Common 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 conveyancer we work with provide it.
Subsequent to protracted discussions with the freeholder of her two bedroom apartment in Balsall Common, Francesca commenced the lease extension process just as her lease was coming close to the all-important eighty-year mark. The lease extension was finalised in March 2005. The landlord’s costs were kept to an absolute minimum.
Dr E Reed completed a studio apartment in Balsall Common in January 2008. The dilemma was if we could estimate the premium would be for a 90 year lease extension. Comparative flats in Balsall Common with 100 year plus lease were worth £225,400. The mid-range ground rent payable was £45 collected annually. The lease ran out on 16 February 2089. Considering the 64 years outstanding we approximated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 plus professional charges.
In 2012 we were contacted by Mr J Laurent who, having was assigned a lease of a one bedroom apartment in Balsall Common in October 2003. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Similar properties in Balsall Common with a long lease were in the region of £270,000. The average ground rent payable was £55 billed every twelve months. The lease finished in 2100. Having 75 years remaining we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of legals.