The market value of Edgbaston leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the unexpired lease term is less than 80 years
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Using our service gives you increased control over the value of your Edgbaston leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Caleb owned a conversion apartment in Edgbaston being sold with a lease of a little over fifty eight years left. Caleb on an informal basis approached his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be due on a lease extension were Caleb to invoke his statutory right. Caleb obtained expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
In 2010 we were e-mailed by Mr and Mrs. C Garcia who, having acquired a one bedroom flat in Edgbaston in July 1996. We are asked if we could estimate the premium would be to prolong the lease by an additional years. Similar properties in Edgbaston with 100 year plus lease were worth £275,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease end date was in 2103. Taking into account 77 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including legals.
Last month we were phoned by Mr and Mrs. M Phillips , who completed a garden apartment in Edgbaston in October 2012. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical properties in Edgbaston with an extended lease were worth £183,600. The average ground rent payable was £65 invoiced every twelve months. The lease expired in 2083. Considering the 57 years left we estimated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of fees.