There is no doubt about it a leasehold flat or house in Birmingham and the Black Country is a wasting asset as a result of the shortening lease. If the residual term has, over one hundred years remaining then this decrease may be negligible that being said there will become a point in time when a lease has less than eighty years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should extend the lease sooner than later. Many flat owners in Birmingham and the Black Country will meet the qualifying criteria; that being said a conveyancer can advise whether you qualify to extend your lease. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
The conveyancers that we work with handle Birmingham and the Black Country 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.
Off the back of lengthy discussions with the freeholder of her leasehold flat in Birmingham and the Black Country, Isabelle initiated the lease extension process just as her lease was nearing the critical eighty-year threshold. The transaction was concluded in August 2011. The freeholder’s costs were restricted to approximately 550 GBP.
Last Christmas we were e-mailed by Dr P Cox , who purchased a one bedroom apartment in Birmingham and the Black Country in June 2002. The question was if we could estimate the price would likely be for a ninety year lease extension. Comparative homes in Birmingham and the Black Country with a long lease were worth £275,000. The average ground rent payable was £55 collected per annum. The lease expired in 2103. Having 77 years as a residual term we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 plus legals.
Last Spring we were called by Mr and Mrs. W Cox , who owned a newly refurbished apartment in Birmingham and the Black Country in May 2011. We are asked if we could shed any light on how much (approximately) price could be to prolong the lease by a further 90 years. Comparative properties in Birmingham and the Black Country with 100 year plus lease were worth £183,600. The mid-range ground rent payable was £65 invoiced monthly. The lease ran out on 11 November 2083. Taking into account 57 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of professional charges.