With a residential leasehold premises in Handsworth, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive particularly once there are less than 80 years left. Anyone in Handsworth with a lease nearing 81 years unexpired should seriously think of extending it as soon as possible. When the lease term has below eighty years left, under the current statute the freeholder can calculate and charge a larger premium, based on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold residencies in Handsworth with in excess of one hundred years outstanding 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 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; |
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service will provide you better control over the value of your Handsworth leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of protracted discussions with the landlord of her one bedroom apartment in Handsworth, Grace commenced the lease extension process as the eighty year mark was fast advancing. The lease extension completed in March 2006. The freeholder’s charges were kept to an absolute minimum.
In 2009 we were contacted by Mr and Mrs. F Hernández who, having bought a basement apartment in Handsworth in February 1997. We are asked if we could estimate the price would be for a ninety year extension to my lease. Similar residencies in Handsworth with an extended lease were in the region of £166,800. The average ground rent payable was £50 collected every twelve months. The lease termination date was on 12 April 2076. Considering the 50 years outstanding we approximated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 plus costs.
Ms U Michel acquired a purpose-built apartment in Handsworth in April 1996. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Similar properties in Handsworth with an extended lease were worth £280,000. The mid-range ground rent payable was £45 collected per annum. The lease lapsed on 17 October 2096. Considering the 70 years remaining we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus fees.