The re-sale value of a leasehold property in Brierley Hill depends on how long the lease has left to run. If it is near to or fewer than eighty years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is ideal to start the lease extension process when the lease still has 82 years remaining so that formalities can be finalised in advance of the 80 year threshold. Statute enables Brierley Hill qualifying lessees to an additional term of 90 years on top of the existing term, at a peppercorn rent (no ground rent). The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Brierley Hill 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.
During the course of the last few months Freddie, started to get near to the 80-year mark with the lease on his purpose- built apartment in Brierley Hill. Having purchased his flat two decades ago, the lease term was of minimal interest. Thankfully, he realised he needed to take action soon on a lease extension. Freddie arranged for a lease extension at the eleventh hour in June. Freddie and the landlord ultimately agreed on the final figure of £5,000 . If he had missed the deadline, the premium would have increased by at least £1,100.
In 2014 we were called by Dr Gemma Rogers who, having purchased a basement apartment in Brierley Hill in September 2000. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by ninety years. Similar premises in Brierley Hill with 100 year plus lease were worth £232,800. The mid-range amount of ground rent was £45 collected quarterly. The lease came to a finish on 16 October 2091. Given that there were 65 years remaining we estimated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of fees.
Last Spring we were approach by Mr and Mrs. U Richardson , who took over the lease of a garden flat in Brierley Hill in September 2009. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical flats in Brierley Hill with a long lease were valued about £275,000. The average ground rent payable was £55 collected monthly. The lease finished in 2102. Considering the 76 years unexpired we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including professional charges.