With a residential leasehold property in Handsworth, you are actually buying an entitlement to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive particularly when there are less than eighty years remaining. Leasehold owners in Handsworth with a lease approaching 81 years left should seriously consider extending it without delay. When a lease has under 80 years remaining, under the current Act the landlord can calculate and demand a larger amount, based on a technical multiplication, strangely termed as “marriage value” which is payable.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 conveyancing solicitors that we work with procure 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 conveyancer we work with provide it.
Last October Connor, came very near to the eighty-year mark with the lease on his one bedroom apartment in Handsworth. Having purchased his property two decades ago, the length of the lease was of no bearing. Thankfully, he realised he needed to take action soon on Extending the lease. Connor extended the lease at the eleventh hour in January. Connor and the freeholder via the management company eventually agreed on the final figure of £5,500 . If the lease had gone lower than eighty years, the figure would have escalated by at least £1,000.
Mr and Mrs. P Phillips was assigned a lease of a ground floor apartment in Handsworth in January 2000. The question was if we could approximate the price could be to prolong the lease by 90 years. Similar residencies in Handsworth with 100 year plus lease were valued about £275,000. The average ground rent payable was £45 collected annually. The lease concluded in 2094. Having 69 years outstanding we approximated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of fees.
In 2013 we were e-mailed by Dr Bethany Bell who, having bought a first floor apartment in Handsworth in July 1998. The question was if we could estimate the premium could be for a 90 year lease extension. Identical homes in Handsworth with a long lease were worth £216,000. The average amount of ground rent was £60 billed annually. The lease expired on 15 May 2083. Given that there were 58 years left we approximated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 plus professional charges.