Heath Hayes leases on residential properties are gradually losing value. Where your lease has about ninety years remaining, you should start thinking about a lease extension. If lease term is less than eighty years, you will then have to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add to the property. Flat owners in Heath Hayes will usually qualify for a lease extension; however a solicitor should be able check if you qualify. In some situations you may not be entitled. There are also strict timetables and procedures to comply with once the process is triggered so it’s sensible to be guided by a conveyancing solicitor during the process.
It is generally accepted that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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 gives you enhanced control over the value of your Heath Hayes leasehold, as your property will be more valuable and marketable in terms of lease length should you want 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.
Trailing unsuccessful negotiations with the landlord of her studio flat in Heath Hayes, Chantelle initiated the lease extension process as the eighty year deadline was fast approaching. The lease extension was concluded in April 2005. The landlord’s fees were restricted to slightly above 500 pounds.
Mr and Mrs. C King owned a one bedroom apartment in Heath Hayes in May 2007. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by a further 90 years. Similar flats in Heath Hayes with an extended lease were in the region of £290,000. The mid-range amount of ground rent was £45 billed quarterly. The lease finished on 27 May 2099. Given that there were 73 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 not including legals.
In 2011 we were approached by Mrs M Scott who, having bought a studio flat in Heath Hayes in July 2010. We are asked if we could estimate the price could be to extend the lease by ninety years. Comparable premises in Heath Hayes with an extended lease were worth £235,600. The average amount of ground rent was £60 invoiced annually. The lease finished in 2088. Considering the 62 years unexpired we approximated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 plus expenses.