Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will normally be granted for a set period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Birkenshaw. Clearly, the period of lease left shortens as time goes by. This may slip by relatively unnoticed when the property has to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more it will cost to obtain a lease extension. Eligible leaseholders in Birkenshaw have the right to extend the lease for a further ninety years in accordance with legislation. You should give careful deliberation before putting off your Birkenshaw lease extension. Putting off the cost now likely increases the price you will ultimately incur to extend your lease
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years left, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 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. |
Regardless of whether you are a tenant or a landlord in Birkenshaw,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Birkenshaw valuers.
Last October Liam, started to get close to the 80-year threshold with the lease on his one bedroom flat in Birkenshaw. Having bought his home twenty years previously, the length of the lease was of no concern. As luck would have it, it dawned on him that he would imminently be paying an inflated amount for Extending the lease. Liam extended the lease just under the wire in August. Liam and the landlord who owned the flat above subsequently agreed on sum of £6,000 . If he not met the deadline, the premium would have become more exhorbitant by a minimum £925.
Mr and Mrs. W Collins moved into a ground floor apartment in Birkenshaw in November 1998. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by ninety years. Similar flats in Birkenshaw with an extended lease were valued around £184,000. The mid-range ground rent payable was £55 invoiced monthly. The lease elapsed on 6 September 2079. Having 53 years outstanding we calculated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 not including fees.
Last Autumn we were contacted by Mr Theo Morris , who was assigned a lease of a garden apartment in Birkenshaw in March 2002. The dilemma was if we could shed any light on how much (approximately) price could be to extend the lease by 90 years. Comparative homes in Birkenshaw with a long lease were valued about £290,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease expired on 5 August 2099. Considering the 73 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.