The value of Burntwood leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate substantially once the unexpired lease term is below than 80 years
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | 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. |
Irrespective of whether you are a tenant or a freeholder in Burntwood,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Burntwood valuers.
In recent months Kyle, came perilously close to the 80-year threshold with the lease on his ground floor flat in Burntwood. In buying his flat two decades ago, the length of the lease was of no relevance. Thankfully, he recognised he would imminently be paying way over the odds for a lease extension. Kyle extended the lease at the eleventh hour last March. Kyle and the landlord in the end settled on the final figure of £6,000 . If the lease had descended to less than eighty years, the sum would have gone up by at least £1,150.
In 2013 we were e-mailed by Mr and Mrs. W Gray who, having completed a basement apartment in Burntwood in June 2011. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by 90 years. Similar residencies in Burntwood with 100 year plus lease were worth £267,600. The average ground rent payable was £65 billed every twelve months. The lease lapsed on 18 November 2093. Given that there were 67 years as a residual term we calculated the premium to the landlord to extend the lease to be between £14,300 and £16,400 plus costs.
Ms B Stewart bought a one bedroom flat in Burntwood in January 2002. The dilemma was if we could shed any light on how much (approximately) price would be to prolong the lease by 90 years. Comparative properties in Burntwood with an extended lease were valued around £206,200. The average ground rent payable was £55 collected quarterly. The lease ended on 24 July 2082. Having 56 years remaining we calculated the premium to the landlord for the lease extension to be between £31,400 and £36,200 plus legals.