With a domestic leasehold property in Edge Hill, you effectively rent it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may consider a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately greater especially once there are less than 80 years left. Anyone in Edge Hill with a lease approaching 81 years remaining should seriously think of extending it sooner than later. Once a lease has under eighty years remaining, under the current legislation the landlord can calculate and charge a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Regardless of whether you are a tenant or a freeholder in Edge Hill,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Edge Hill valuers.
Ollie owned a studio flat in Edge Hill being sold with a lease of a little over 59 years outstanding. Ollie informally approached his freeholder a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Ollie to exercise his statutory right. Ollie obtained expert advice and secured satisfactory deal without resorting to tribunal and sell the flat.
In 2012 we were called by Dr Adam Campbell who, having moved into a first floor apartment in Edge Hill in September 2012. The question was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Identical residencies in Edge Hill with a long lease were in the region of £208,200. The mid-range amount of ground rent was £65 collected quarterly. The lease elapsed in 2086. Taking into account 61 years left we calculated the compensation to the landlord for the lease extension to be within £20,000 and £23,000 exclusive of expenses.
In 2013 we were contacted by Mrs P Robinson who, having took over the lease of a garden flat in Edge Hill in January 2006. We are asked if we could estimate the premium could be for a ninety year lease extension. Comparable premises in Edge Hill with a long lease were worth £260,000. The mid-range amount of ground rent was £50 billed monthly. The lease ended on 13 May 2097. Having 72 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of expenses.