Birchgrove leases on residential deteriorating in value. Where your lease has about ninety years left, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease falls below this level then you begin incurring an additional element called marriage value. Flat owners in Birchgrove will mostly be legally entitled to a lease extension; however It would be wise to check with a conveyancing solicitor to check if you qualify. In certain circumstances you may not be entitled. There are prescribed timetables and formalities to follow once the process has started so it’s wise to be guided by a conveyancer during the process.
Leasehold properties in Birchgrove with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Birchgrove,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 Birchgrove valuers.
In 2014 John, came very close to the eighty-year mark with the lease on his first floor flat in Birchgrove. Having purchased his flat twenty years ago, the unexpired term was of little interest. As luck would have it, he recognised he would soon be paying an inflated amount for Extending the lease. John extended the lease just in the nick of time in August. John and the freeholder in the end agreed on the final figure of £5,000 . If the lease had slid to less than 80 years, the amount would have escalated by at least £850.
In 2012 we were phoned by Dr L Bernard who, having bought a garden apartment in Birchgrove in January 2000. We are asked if we could approximate the price would be to extend the lease by 90 years. Similar homes in Birchgrove with an extended lease were valued around £205,000. The mid-range ground rent payable was £50 billed every twelve months. The lease elapsed on 15 January 2103. Taking into account 78 years as a residual term we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of fees.
In 2010 we were e-mailed by Dr Jamie Martinez who, having took over the lease of a studio apartment in Birchgrove in March 2011. We are asked if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparative flats in Birchgrove with 100 year plus lease were in the region of £267,600. The mid-range ground rent payable was £65 invoiced annually. The lease terminated on 20 July 2092. Given that there were 67 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £14,300 and £16,400 exclusive of costs.