It’s a harsh certainty that a Pelsall residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Pelsall property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher amount will be due. Most leasehold owners in Pelsall will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the process.
Leasehold premises in Pelsall with more than 100 years left 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 home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Pelsall,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Pelsall valuers.
Mason owned a 2 bedroom flat in Pelsall being marketed with a lease of a little over 72 years remaining. Mason informally approached his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Mason to exercise his statutory right. Mason obtained expert advice and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
Ms N Morgan purchased a studio flat in Pelsall in February 1996. We are asked if we could approximate the price could be to extend the lease by 90 years. Identical residencies in Pelsall with a long lease were valued about £285,000. The average amount of ground rent was £45 collected per annum. The lease ran out on 16 March 2097. Taking into account 71 years as a residual term we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of costs.
Last Spring we were phoned by Mr and Mrs. V David , who owned a ground floor flat in Pelsall in August 2011. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Similar flats in Pelsall with a long lease were in the region of £225,800. The mid-range ground rent payable was £60 invoiced per annum. The lease concluded in 2086. Considering the 60 years left we calculated the premium to the freeholder for the lease extension to be between £25,700 and £29,600 exclusive of professional charges.