The market value of a leasehold property in Barnt Green is impacted by how long the lease has remaining. If it is close to or fewer than 80 years you should anticipate difficulties on re-sale, so it is advisable to arrange for a lease extension before buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years remaining so that formalities can be addressed prior to the eighty year threshold. Statute enables Barnt Green qualifying lessees to a 90 year extension added to their residual lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the premises 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. |
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Barnt Green,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Barnt Green valuers.
Last Autumn Dylan, started to get close to the eighty-year mark with the lease on his ground floor flat in Barnt Green. In buying his flat 19 years previously, the lease term was of minimal importance. As luck would have it, it dawned on him that he needed to take action soon on a lease extension. Dylan arranged for a lease extension just under the wire last July. Dylan and the landlord who owned the flat above in the end agreed on the final figure of £6,000 . If he not met the deadline, the premium would have increased by a minimum £975.
In 2011 we were e-mailed by Ms T Bennett who, having completed a garden flat in Barnt Green in April 1995. We are asked if we could approximate the price could be to prolong the lease by 90 years. Comparative properties in Barnt Green with a long lease were valued about £300,000. The mid-range ground rent payable was £50 billed every twelve months. The lease ran out in 2102. Taking into account 76 years left we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including fees.
Last Spring we were e-mailed by Dr Eliot Williams , who completed a newly refurbished apartment in Barnt Green in January 2006. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Similar properties in Barnt Green with an extended lease were valued about £257,800. The average amount of ground rent was £65 invoiced quarterly. The lease concluded in 2091. Taking into account 65 years remaining we estimated the compensation to the freeholder to extend the lease to be within £18,100 and £20,800 exclusive of legals.