The re-sale value of a leasehold property in Edgbaston is impacted by how long the lease has remaining. If it is close to or less than 80 years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension prior to buying. Ideally one should start the process of extending the lease is when a lease still has 82 years unexpired so that a lease extension can be finalised well before the eighty year cut off point. Statute entitles Edgbaston qualifying lessees to acquire a lease extension of 90 years on top of the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
| 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 freeholder in Edgbaston,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 experience and the close ties they enjoy with Edgbaston valuers.
Two years ago Dexter, came very near to the 80-year mark with the lease on his two bedroom flat in Edgbaston. In buying his property two decades ago, the unexpired term was of no concern. by good luck, he became aware that he needed to take steps soon on Extending the lease. Dexter extended the lease at the eleventh hour last August. Dexter and the freeholder via the managing agents eventually settled on sum of £5,000 . If the lease had gone below eighty years, the figure would have gone up by at least £1,050.
Last Winter we were e-mailed by Dr G Gray , who completed a ground floor flat in Edgbaston in February 2009. The question was if we could approximate the price would be to prolong the lease by a further 90 years. Identical homes in Edgbaston with 100 year plus lease were worth £227,800. The average amount of ground rent was £45 collected yearly. The lease came to a finish on 28 July 2091. Taking into account 65 years as a residual term we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including fees.
Mr and Mrs. Y Collins was assigned a lease of a studio apartment in Edgbaston in August 1996. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Identical premises in Edgbaston with 100 year plus lease were worth £270,000. The average amount of ground rent was £55 invoiced annually. The lease ran out in 2102. Having 76 years left we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus professional charges.