It’s a harsh truth that a Ladywood residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Ladywood property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term drops below 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Ladywood will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the process.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the property will be worth the same as a freehold for many years in the future.
| 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; |
| Coventry Building Society | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Yorkshire 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. |
Engaging our service will provide you better control over the value of your Ladywood leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Caleb was the the leasehold proprietor of a conversion apartment in Ladywood on the market with a lease of a little over fifty eight years left. Caleb informally contacted his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Caleb to invoke his statutory right. Caleb procured expert advice and secured satisfactory resolution without going to tribunal and readily saleable.
In 2014 we were e-mailed by Mr and Mrs. G Hill who, having was assigned a lease of a recently refurbished flat in Ladywood in April 2002. We are asked if we could approximate the price would likely be to extend the lease by a further 90 years. Comparable homes in Ladywood with a long lease were in the region of £242,600. The average ground rent payable was £45 collected every twelve months. The lease came to a finish on 5 August 2093. Having 67 years remaining we calculated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 not including legals.
Last Summer we were called by Ms T Baker , who moved into a purpose-built apartment in Ladywood in August 2007. The question was if we could estimate the premium would be to extend the lease by an additional years. Identical flats in Ladywood with a long lease were valued about £280,000. The average amount of ground rent was £55 billed quarterly. The lease ran out on 6 September 2104. Given that there were 78 years left we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of fees.