Birkenhead leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Birkenhead tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Birkenhead you must investigate if your lease has between seventy and ninety years left. There are good reasons why a Birkenhead flat owner with a lease having around eighty years left should take action to ensure that a lease extension is put in place without delay
Leasehold residencies in Birkenhead 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 circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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. |
Using our service will provide you better control over the value of your Birkenhead leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Freddie, started to get close to the eighty-year mark with the lease on his studio flat in Birkenhead. Having purchased his property 18 years previously, the lease term was of no importance. As luck would have it, he noticed he would imminently be paying an escalated premium for Extending the lease. Freddie arranged for a lease extension just under the wire in September. Freddie and the landlord eventually agreed on sum of £5,500 . If he had missed the deadline, the figure would have increased by at least £1,125.
Last month we were contacted by Mr and Mrs. Y Clark , who was assigned a lease of a ground floor apartment in Birkenhead in February 2000. We are asked if we could estimate the premium would likely be to extend the lease by ninety years. Comparative flats in Birkenhead with a long lease were valued about £181,600. The mid-range ground rent payable was £55 invoiced yearly. The lease concluded on 8 January 2078. Taking into account 52 years left we calculated the premium to the landlord for the lease extension to be within £30,400 and £35,200 plus expenses.
Dr Abbie James purchased a basement flat in Birkenhead in October 2008. We are asked if we could estimate the premium could be to prolong the lease by ninety years. Similar premises in Birkenhead with 100 year plus lease were worth £285,000. The average amount of ground rent was £45 billed yearly. The lease terminated in 2098. Given that there were 72 years left we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus expenses.