Ladywood leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Ladywood residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Ladywood you should check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Ladywood with over one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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 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; |
| 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. |
Lease extensions in Ladywood can be a difficult process. We recommend you procure guidance from a conveyancer and valuer 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 dealing with Ladywood lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
After unsuccessful correspondence with the freeholder of her one bedroom apartment in Ladywood, Anna commenced the lease extension process just as the lease was nearing the all-important 80-year mark. The legal work was finalised in August 2007. The freeholder’s fees were kept to an absolute minimum.
Dr Luca Smith moved into a one bedroom apartment in Ladywood in January 2004. We are asked if we could approximate the price could be to prolong the lease by 90 years. Comparative properties in Ladywood with 100 year plus lease were valued about £186,000. The mid-range amount of ground rent was £65 collected annually. The lease expired in 2083. Given that there were 58 years unexpired we approximated the compensation to the landlord for the lease extension to be within £23,800 and £27,400 not including costs.
In 2009 we were contacted by Dr W Cox who, having took over the lease of a one bedroom flat in Ladywood in October 2011. The question was if we could estimate the premium could be for a 90 year lease extension. Comparable flats in Ladywood with an extended lease were valued about £250,000. The mid-range ground rent payable was £50 billed yearly. The lease ran out in 2094. Given that there were 69 years outstanding we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus fees.