When it comes to domestic leasehold premises in Kings Heath, you are actually purchasing a right to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly notably once there are less than eighty years remaining. Leasehold owners in Kings Heath with a lease nearing 81 years remaining should seriously think of extending it sooner than later. When the lease term has fewer than eighty years left, under the relevant legislation the freeholder is entitled to calculate and levy a larger amount, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold premises in Kings Heath with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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; |
| 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. |
| 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. |
Engaging our service gives you enhanced control over the value of your Kings Heath leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Jake was the the leasehold owner of a high value apartment in Kings Heath being marketed with a lease of a little over fifty eight years remaining. Jake on an informal basis spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be payable on a lease extension were Jake to invoke his statutory right. Jake procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
Last Winter we were e-mailed by Mr F Johnson , who owned a basement flat in Kings Heath in May 1998. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Comparative premises in Kings Heath with a long lease were valued around £233,200. The average amount of ground rent was £60 invoiced monthly. The lease ended on 3 October 2087. Having 61 years unexpired we calculated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 not including legals.
In 2011 we were called by Mr M Mercier who, having owned a recently refurbished apartment in Kings Heath in July 2002. The question was if we could estimate the price could be for a ninety year extension to my lease. Similar residencies in Kings Heath with an extended lease were valued around £166,800. The average amount of ground rent was £50 collected every twelve months. The lease finished in 2076. Considering the 50 years unexpired we estimated the premium to the landlord to extend the lease to be within £32,300 and £37,400 not including fees.