Nechells leases on residential properties are gradually losing value. if your lease has about ninety years remaining, you should start thinking about a lease extension. An important point to note is that it is desirable for a lease extension to be in place before the term of the current lease drops below eighty years - otherwise a higher amount will be payable. Leasehold owners in Nechells will mostly be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to check your eligibility. In some circumstances you may not qualify. There are prescribed deadlines and formalities to follow once the process has started so it’s wise to be guided by a conveyancing solicitor during the process.
It is generally accepted that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to 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. |
| 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 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; |
| 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 |
The lawyers that we work with handle Nechells lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Eliot owned a 2 bedroom flat in Nechells on the market with a lease of fraction over sixty years unexpired. Eliot on an informal basis spoke with his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £50 per annum. No ground rent would be payable on a lease extension were Eliot to exercise his statutory right. Eliot obtained expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
Last Winter we were called by Mr and Mrs. G Dupont , who acquired a first floor apartment in Nechells in June 2010. The dilemma was if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Similar residencies in Nechells with 100 year plus lease were worth £280,000. The average ground rent payable was £55 invoiced monthly. The lease finished on 11 September 2104. Having 78 years outstanding we approximated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus expenses.
Mr Luca Simon took over the lease of a basement flat in Nechells in August 2010. We are asked if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparative residencies in Nechells with 100 year plus lease were worth £186,000. The average amount of ground rent was £65 collected quarterly. The lease lapsed on 7 July 2084. Having 58 years unexpired we approximated the premium to the landlord for the lease extension to be within £24,700 and £28,600 plus fees.