Chances are that if you own a flat in Kings Heath you actually own a long leasehold interest over your property
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure Kings Heath 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 conveyancing solicitor we work with provide it.
William was the the leasehold proprietor of a conversion flat in Kings Heath on the market with a lease of just over 59 years outstanding. William informally approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were William to exercise his statutory right. William procured expert advice and secured satisfactory resolution informally and sell the flat.
In 2014 we were contacted by Mr and Mrs. Y Thomas who, having acquired a ground floor apartment in Kings Heath in June 2010. The dilemma was if we could shed any light on how much (roughly) premium would be to prolong the lease by a further 90 years. Comparative flats in Kings Heath with an extended lease were valued around £184,000. The average amount of ground rent was £55 billed every twelve months. The lease elapsed in 2079. Given that there were 53 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 plus expenses.
Last Winter we were contacted by Mr V Bailey , who owned a ground floor flat in Kings Heath in March 2009. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparable properties in Kings Heath with an extended lease were in the region of £290,000. The mid-range amount of ground rent was £45 invoiced quarterly. The lease concluded in 2099. Having 73 years remaining we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of legals.