Childwall leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Childwall tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Childwall you would be well advised to investigate if your lease has between seventy and ninety years left. There are compelling reasons why a Childwall flat owner with a lease having around 80 years remaining should take steps to ensure that a lease extension is effected without delay
Leasehold properties in Childwall with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Childwall,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Childwall valuers.
Milo was the the leasehold proprietor of a conversion apartment in Childwall being marketed with a lease of fraction over 61 years unexpired. Milo informally contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Milo to exercise his statutory right. Milo obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
Mr and Mrs. F Taylor was assigned a lease of a first floor apartment in Childwall in May 2001. We are asked if we could approximate the premium would be for a 90 year extension to my lease. Similar properties in Childwall with a long lease were valued around £250,000. The average amount of ground rent was £50 billed quarterly. The lease concluded in 2094. Taking into account 69 years unexpired we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.
Last Autumn we were called by Mr and Mrs. P Ward , who completed a basement flat in Childwall in September 2002. The dilemma was if we could approximate the premium would be for a ninety year extension to my lease. Similar homes in Childwall with 100 year plus lease were worth £285,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease ran out in 2105. Having 80 years remaining we estimated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including fees.