It’s an underpublicised certainty that a Birmingham and the Black Country residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Birmingham and the Black Country property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining falls under 80 years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Birmingham and the Black Country will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure 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 conveyancer we work with provide it.
After unsuccessful discussions with the landlord of her basement apartment in Birmingham and the Black Country, Caitlin commenced the lease extension process just as the lease was approaching the all-important 80-year deadline. The legal work completed in August 2012. The landlord’s costs were kept to an absolute minimum.
In 2010 we were approached by Dr H Stewart who, having acquired a ground floor flat in Birmingham and the Black Country in June 1996. The dilemma was if we could approximate the premium could be to extend the lease by a further 90 years. Similar residencies in Birmingham and the Black Country with 100 year plus lease were valued about £186,000. The average ground rent payable was £65 billed per annum. The lease lapsed in 2084. Given that there were 58 years remaining we calculated the compensation to the landlord to extend the lease to be between £24,700 and £28,600 plus costs.
Mrs Elizabeth Mercier moved into a purpose-built flat in Birmingham and the Black Country in April 2009. The dilemma was if we could estimate the price would be to prolong the lease by a further 90 years. Similar premises in Birmingham and the Black Country with a long lease were worth £250,000. The mid-range ground rent payable was £50 invoiced per annum. The lease concluded on 9 May 2095. Having 69 years as a residual term we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including legals.