For anyone whose Catshill property is held on a long lease, the message is clear – if no remedial action is taken, the property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease.
It is generally accepted that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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 conveyancing solicitors that we work with handle Catshill 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 lawyer we work with provide it.
Following lengthy correspondence with the landlord of her studio apartment in Catshill, Madeleine commenced the lease extension process as the eighty year threshold was rapidly approaching. The lease extension completed in May 2005. The freeholder’s charges were restricted to approximately 650 pounds.
In 2009 we were called by Mr Archie Thomas who, having moved into a purpose-built apartment in Catshill in June 2011. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative properties in Catshill with 100 year plus lease were in the region of £210,600. The mid-range amount of ground rent was £45 billed monthly. The lease expired on 4 August 2087. Taking into account 62 years remaining we calculated the compensation to the landlord to extend the lease to be within £18,100 and £20,800 exclusive of fees.
Dr Logan Clarke bought a recently refurbished flat in Catshill in May 1995. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Comparable properties in Catshill with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 invoiced annually. The lease expired in 2098. Having 73 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.