For those whose Birkenshaw flat is held on a long lease, the message is clear – if nothing is done, the property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension.
Leasehold premises in Birkenshaw with over one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with procure Birkenshaw 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 conveyancing solicitor we work with provide it.
Kai owned a high value apartment in Birkenshaw on the market with a lease of a little over 72 years outstanding. Kai on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Kai to exercise his statutory right. Kai procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
Mr Daniel Torres was assigned a lease of a garden apartment in Birkenshaw in April 2012. We are asked if we could approximate the premium would be for a 90 year lease extension. Similar premises in Birkenshaw with 100 year plus lease were in the region of £174,200. The mid-range ground rent payable was £55 invoiced every twelve months. The lease ended on 28 March 2076. Given that there were 51 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 plus expenses.
Last Spring we were phoned by Mr Jake Harris , who bought a studio apartment in Birkenshaw in June 2007. The question was if we could approximate the premium would likely be to extend the lease by ninety years. Identical homes in Birkenshaw with a long lease were valued about £280,000. The mid-range amount of ground rent was £45 collected yearly. The lease ended in 2096. Taking into account 71 years remaining we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including legals.