Locks Heath 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 becomes more expensive. It is the case that most Locks Heath tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Locks Heath you really ought to check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Locks Heath with over 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you increased control over the value of your Locks Heath leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Alexander owned a 2 bedroom flat in Locks Heath on the market with a lease of a little over sixty years unexpired. Alexander informally spoke with his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Alexander to exercise his statutory right. Alexander procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
In 2012 we were e-mailed by Dr Reuben Harris who, having completed a purpose-built apartment in Locks Heath in March 1995. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparable residencies in Locks Heath with 100 year plus lease were worth £285,000. The average ground rent payable was £45 invoiced every twelve months. The lease ended on 3 February 2097. Taking into account 71 years left we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus expenses.
Ms Victoria Bailey acquired a newly refurbished apartment in Locks Heath in July 2003. The question was if we could approximate the premium could be to extend the lease by a further 90 years. Comparable residencies in Locks Heath with 100 year plus lease were worth £230,800. The average ground rent payable was £60 billed monthly. The lease lapsed in 2086. Having 60 years as a residual term we approximated the premium to the landlord for the lease extension to be between £24,700 and £28,600 exclusive of legals.