Kings Norton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Kings Norton enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Kings Norton you should investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
Lease extensions in Kings Norton can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Kings Norton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Theo, started to get close to the 80-year threshold with the lease on his purpose- built flat in Kings Norton. Having bought his flat two decades ago, the length of the lease was of minimal significance. Thankfully, he recognised he would soon be paying an escalated premium for Extending the lease. Theo extended the lease just under the wire last July. Theo and the freeholder subsequently settled on a premium of £5,000 . If he failed to meet the deadline, the sum would have increased by at least £875.
Last year we were phoned by Ms Robyn Gray , who completed a one bedroom flat in Kings Norton in March 2009. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Similar residencies in Kings Norton with a long lease were worth £218,400. The average amount of ground rent was £60 invoiced per annum. The lease ended on 1 May 2083. Having 59 years outstanding we calculated the premium to the landlord to extend the lease to be within £27,600 and £31,800 not including costs.
Last year we were called by Mr K García , who owned a one bedroom apartment in Kings Norton in February 2006. The question was if we could approximate the premium would likely be to extend the lease by a further 90 years. Comparative flats in Kings Norton with 100 year plus lease were valued about £205,000. The average ground rent payable was £50 billed annually. The lease expired on 4 January 2103. Given that there were 79 years outstanding we approximated the premium to the landlord to extend the lease to be between £7,600 and £8,800 exclusive of legals.