When it comes to residential leasehold premises in Hanham, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive notably once there are less than 80 years left. Residents in Hanham with a lease approaching 81 years left should seriously consider extending it as soon as possible. When the lease term has below eighty years remaining, under the current Act the landlord can calculate and demand a larger premium, based on a technical multiplication, known as “marriage value” which is payable.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Hanham 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.
18 months ago Caleb, came perilously near to the eighty-year threshold with the lease on his two bedroom apartment in Hanham. Having bought his property 18 years ago, the lease term was of minimal significance. Luckily, he recognised he would soon be paying an escalated premium for a lease extension. Caleb arranged for a lease extension at the eleventh hour in July. Caleb and the landlord eventually settled on an amount of £6,000 . If the lease had dropped to less than 80 years, the premium would have increased by a minimum £1,150.
In 2011 we were contacted by Dr Milo Hill who, having was assigned a lease of a one bedroom flat in Hanham in August 2012. The question was if we could approximate the premium would be to extend the lease by 90 years. Identical premises in Hanham with 100 year plus lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced monthly. The lease finished on 17 October 2101. Given that there were 75 years left we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of fees.
Last Autumn we were contacted by Mr and Mrs. R Morgan , who bought a one bedroom flat in Hanham in November 2009. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Comparable properties in Hanham with 100 year plus lease were in the region of £173,800. The average amount of ground rent was £65 billed annually. The lease finished on 19 February 2081. Having 55 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of expenses.