It’s an underpublicised truth that a Harborne residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Harborne property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining slips under eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Harborne will be able to extend under the legislation; however a conveyancer will be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Harborne,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Harborne valuers.
Subsequent to lengthy negotiations with the freeholder of her garden flat in Harborne, Stephanie initiated the lease extension process as the eighty year mark was rapidly approaching. The transaction was finalised in March 2010. The landlord’s fees were kept to an absolute minimum.
In 2014 we were called by Mr and Mrs. C Bailey who, having completed a purpose-built apartment in Harborne in May 2002. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparable residencies in Harborne with an extended lease were valued around £275,000. The mid-range ground rent payable was £55 invoiced per annum. The lease ended on 12 June 2102. Taking into account 76 years left we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of legals.
In 2013 we were approached by Mr Nathan Martin who, having took over the lease of a newly refurbished apartment in Harborne in April 1996. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative flats in Harborne with a long lease were valued about £176,200. The mid-range ground rent payable was £65 collected monthly. The lease lapsed on 23 April 2082. Taking into account 56 years left we calculated the premium to the landlord to extend the lease to be within £29,500 and £34,000 not including costs.