The only way is down when it comes to Fradley lease terms. Fradley flats that have a lease term lower than eighty years will drop in value at a rapid rate, and the cost to extend your lease will rise.
Leasehold residencies in Fradley with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
| 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. |
The lawyers that we work with procure Fradley lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
After unsuccessful discussions with the landlord of her purpose-built flat in Fradley, Shannon commenced the lease extension process just as the lease was approaching the critical 80-year mark. The lease extension was finalised in November 2009. The landlord’s charges were negotiated to slightly above 600 GBP.
Last Autumn we were e-mailed by Mr and Mrs. I Nelson , who acquired a one bedroom apartment in Fradley in July 2000. We are asked if we could estimate the premium would likely be to prolong the lease by a further 90 years. Comparable premises in Fradley with a long lease were valued around £183,600. The mid-range ground rent payable was £65 collected annually. The lease expired in 2083. Taking into account 57 years remaining we calculated the premium to the landlord to extend the lease to be within £28,500 and £33,000 not including professional charges.
In 2014 we were contacted by Dr P Morgan who, having acquired a recently refurbished apartment in Fradley in February 2012. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparable properties in Fradley with an extended lease were valued about £245,000. The average ground rent payable was £50 collected per annum. The lease expiry date was in 2094. Considering the 68 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus costs.