Kings Heath leases on domestic properties are gradually losing value. Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for your lease extension to be in place before the term of the current lease dips lower than eighty years - otherwise a higher amount will be due. Leasehold owners in Kings Heath will usually qualify for a lease extension; however it’s a good idea to check with a conveyancer to check your eligibility. In some circumstances you may not be entitled. There are prescribed deadlines and formalities to comply with once the process has started so it’s best to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Kings Heath,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 in-depth market knowledge and the close ties they enjoy with Kings Heath valuers.
Last Autumn Eli, started to get close to the 80-year mark with the lease on his purpose- built flat in Kings Heath. In buying his property two decades ago, the unexpired term was of no significance. Fortunately, he became aware that he would imminently be paying way over the odds for Extending the lease. Eli arranged for a lease extension just in the nick of time last July. Eli and the freeholder in the end settled on a premium of £6,000 . If the lease had slipped below eighty years, the amount would have increased by a minimum £875.
In 2013 we were e-mailed by Dr K Bennett who, having owned a basement apartment in Kings Heath in April 2012. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Similar premises in Kings Heath with a long lease were in the region of £295,000. The mid-range amount of ground rent was £45 collected annually. The lease end date was on 18 February 2101. Taking into account 75 years left we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus costs.
Last February we were e-mailed by Mr and Mrs. L Gray , who purchased a studio flat in Kings Heath in April 2010. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparable properties in Kings Heath with a long lease were valued around £250,400. The average ground rent payable was £65 billed quarterly. The lease expired on 20 May 2090. Considering the 64 years remaining we approximated the premium to the landlord for the lease extension to be between £19,000 and £22,000 plus costs.