The market value of a leasehold property in Birkenhead is impacted by how long the lease has left to run. If it is close to or less than eighty years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended before buying. Ideally one should start the lease extension process when a lease still has 82 years to run so that formalities can be finalised ahead of the eighty year cut off point. Current legislation enables Birkenhead qualifying lessees to an additional term of ninety years in addition to the existing term, at a nominal rent (zero ground rent). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with undertake Birkenhead 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.
Half a year ago David, came perilously near to the 80-year threshold with the lease on his basement apartment in Birkenhead. In buying his property 18 years previously, the lease term was of no relevance. Fortunately, he noticed he needed to take action soon on Extending the lease. David was able to extend his lease just under the wire last May. David and the freeholder in the end agreed on the final figure of £5,500 . If he failed to meet the deadline, the sum would have become more exhorbitant by a minimum £875.
In 2010 we were approached by Dr Ellie Baker who, having acquired a basement flat in Birkenhead in June 2002. The question was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable homes in Birkenhead with an extended lease were in the region of £275,000. The mid-range ground rent payable was £65 invoiced every twelve months. The lease ended on 17 October 2093. Taking into account 68 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of fees.
In 2011 we were contacted by Mr T Jones who, having bought a one bedroom flat in Birkenhead in October 1997. The question was if we could shed any light on how much (approximately) price would be to extend the lease by 90 years. Comparable flats in Birkenhead with a long lease were worth £213,600. The mid-range ground rent payable was £60 billed monthly. The lease lapsed on 12 April 2082. Taking into account 57 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 not including costs.