On the balance of probabilities where you own a flat in Handsworth you actually own a long leasehold interest over your property
It is generally considered that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Handsworth 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.
In recent months Zachary, came very close to the eighty-year mark with the lease on his ground floor apartment in Handsworth. Having bought his property two decades ago, the unexpired term was of no concern. Thankfully, he became aware that he needed to take steps soon on Extending the lease. Zachary was able to extend his lease at the eleventh hour in July. Zachary and the freeholder via the managing agents in the end settled on sum of £5,000 . If the lease had gone to less than eighty years, the sum would have escalated by at least £850.
In 2012 we were approached by Ms Emma Roberts who, having bought a basement apartment in Handsworth in July 2003. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by an additional years. Identical premises in Handsworth with 100 year plus lease were in the region of £240,600. The average ground rent payable was £60 collected yearly. The lease expired in 2088. Given that there were 62 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 not including professional charges.
Last Summer we were e-mailed by Ms Nicole Martin , who moved into a basement flat in Handsworth in June 2012. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Identical properties in Handsworth with a long lease were worth £174,200. The average ground rent payable was £55 invoiced quarterly. The lease lapsed on 14 May 2077. Having 51 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of expenses.