Unfortunately that a Rednal residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Rednal property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term slips under eighty 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 additional value that a lease extension will add the property Most flat owners in Rednal will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
Leasehold premises in Rednal with in excess of one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Rednal,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rednal valuers.
Reuben was the the leasehold proprietor of a 2 bedroom flat in Rednal being sold with a lease of a little over sixty years unexpired. Reuben on an informal basis approached his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of 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 Reuben to exercise his statutory right. Reuben procured expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last Summer we were phoned by Ms G Jackson , who was assigned a lease of a newly refurbished apartment in Rednal in August 1995. The question was if we could approximate the price would be to extend the lease by an additional years. Comparative flats in Rednal with an extended lease were worth £198,800. The average amount of ground rent was £55 billed yearly. The lease finished on 24 April 2080. Considering the 55 years left we calculated the compensation to the freeholder to extend the lease to be between £33,300 and £38,400 exclusive of fees.
Last Autumn we were contacted by Dr Lily Wright , who purchased a garden apartment in Rednal in April 1999. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by 90 years. Comparable residencies in Rednal with 100 year plus lease were in the region of £295,000. The average ground rent payable was £45 invoiced monthly. The lease ended on 28 March 2100. Taking into account 75 years unexpired we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 not including legals.