For those whose Great Barr flat is held on a long lease, our message is clear – if you do nothing, your property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold residencies in Great Barr with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges merit 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Lease extensions in Great Barr can be a difficult process. We recommend you get guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Great Barr lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Muhammad owned a 2 bedroom flat in Great Barr being sold with a lease of fraction over 72 years left. Muhammad on an informal basis contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Muhammad to invoke his statutory right. Muhammad obtained expert legal guidance and was able to make a more informed decision and deal with the matter and readily saleable.
Last year we were called by Mr and Mrs. R Dupont , who purchased a one bedroom flat in Great Barr in July 1998. The question was if we could approximate the premium would be to prolong the lease by an additional years. Comparable homes in Great Barr with an extended lease were worth £200,000. The mid-range amount of ground rent was £50 billed monthly. The lease ran out in 2103. Given that there were 77 years left we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.
Last year we were e-mailed by Dr J Mitchell , who purchased a ground floor apartment in Great Barr in February 2005. We are asked if we could approximate the price would be for a 90 year extension to my lease. Comparative properties in Great Barr with an extended lease were valued about £260,200. The average ground rent payable was £65 invoiced quarterly. The lease terminated on 14 April 2092. Given that there were 66 years left we calculated the premium to the landlord for the lease extension to be between £16,200 and £18,600 exclusive of costs.