With a domestic leasehold premises in Small Heath, you are actually buying a right to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive especially when there are fewer than eighty years remaining. Anyone in Small Heath with a lease approaching 81 years remaining should seriously think of extending it without delay. Once a lease has fewer than 80 years left, under the relevant legislation the freeholder can calculate and levy a larger premium, assessed on a technical computation, strangely termed as “marriage value” which is due.
Leasehold premises in Small Heath with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Lease extensions in Small Heath can be a difficult process. We recommend you get guidance from a conveyancing solicitor and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Small Heath lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Michael was the the leasehold proprietor of a high value apartment in Small Heath being marketed with a lease of just over 61 years remaining. Michael informally contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 yearly. No ground rent would be due on a lease extension were Michael to invoke his statutory right. Michael procured expert advice and secured satisfactory deal informally and ending up with a market value flat.
Last November we were called by Mr and Mrs. H Rogers , who was assigned a lease of a basement flat in Small Heath in November 2008. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year lease extension. Similar homes in Small Heath with a long lease were valued about £250,000. The average ground rent payable was £50 invoiced per annum. The lease ended on 3 March 2094. Given that there were 69 years outstanding we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus professional charges.
In 2012 we were phoned by Dr Rebecca Mercier who, having was assigned a lease of a first floor flat in Small Heath in July 2007. The question was if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparative flats in Small Heath with a long lease were valued about £290,000. The mid-range amount of ground rent was £60 invoiced quarterly. The lease ran out in 2105. Taking into account 80 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including costs.