Handsworth leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Handsworth tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Handsworth you would be well advised to investigate if your lease has between 70 and 90 years left. There are good reasons why a Handsworth leaseholder with a lease having around eighty years left should take action to ensure that a lease extension is put in place without delay
Leasehold properties in Handsworth with more than one hundred years unexpired on the lease are sometimes 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 justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
The lawyers that we work with handle 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 lawyer we work with provide it.
Off the back of protracted discussions with the freeholder of her studio apartment in Handsworth, Courtney commenced the lease extension process just as her lease was nearing the crucial eighty-year mark. The legal work completed in April 2015. The freeholder’s fees were restricted to below 500 pounds.
Mr and Mrs. T Martin completed a purpose-built flat in Handsworth in November 1998. The question was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Comparative flats in Handsworth with 100 year plus lease were worth £250,400. The mid-range ground rent payable was £65 invoiced every twelve months. The lease came to a finish on 9 July 2089. Given that there were 64 years left we calculated the premium to the freeholder for the lease extension to be within £19,000 and £22,000 not including legals.
In 2010 we were e-mailed by Ms J Lee who, having moved into a one bedroom apartment in Handsworth in August 2004. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Similar homes in Handsworth with an extended lease were worth £184,000. The average ground rent payable was £55 collected quarterly. The lease ended in 2078. Considering the 53 years remaining we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of professional charges.