The value of Erdington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the unexpired lease term is less than eighty years
It is generally accepted that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you enhanced control over the value of your Erdington leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy negotiations with the landlord of her studio flat in Erdington, Rhiannon commenced the lease extension process as the 80 year threshold was swiftly advancing. The transaction was finalised in June 2010. The freeholder’s costs were kept to an absolute minimum.
In 2010 we were contacted by Dr Ollie Murphy who, having was assigned a lease of a garden apartment in Erdington in September 2011. We are asked if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Similar residencies in Erdington with an extended lease were in the region of £265,000. The mid-range amount of ground rent was £50 collected monthly. The lease ran out on 17 September 2098. Having 73 years unexpired we approximated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
Dr D Collins moved into a garden apartment in Erdington in March 1997. The question was if we could estimate the premium would be for a ninety year extension to my lease. Comparative residencies in Erdington with an extended lease were worth £264,000. The mid-range amount of ground rent was £60 billed annually. The lease expired in 2078. Taking into account 53 years as a residual term we approximated the premium to the landlord to extend the lease to be between £37,100 and £42,800 plus expenses.