Smethwick leases on residential deteriorating in value. Where your lease has in the region of 90 years left, you should start thinking about a lease extension. 80 years is a significant number: when the remaining term of a lease drops below this level then you begin incurring an additional element called marriage value. Leasehold owners in Smethwick will usually be legally entitled to a lease extension; however a solicitor should be able confirm your eligibility. In certain situations you may not be entitled. There are prescribed timetables and steps to follow once the process is initiated so it’s best to be guided by a conveyancer during the process.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Smethwick can be a difficult process. We recommend you get guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
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 Smethwick lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last year Harry, came very close to the eighty-year mark with the lease on his basement apartment in Smethwick. In buying his flat two decades ago, the unexpired term was of little relevance. Luckily, he realised he would imminently be paying an inflated amount for Extending the lease. Harry was able to extend his lease at the eleventh hour last July. Harry and the landlord ultimately settled on a premium of £5,500 . If the lease had slipped lower than eighty years, the premium would have gone up by at least £1,100.
In 2013 we were contacted by Dr J Watson who, having purchased a garden flat in Smethwick in May 2006. The dilemma was if we could shed any light on how much (approximately) price would be for a ninety year extension to my lease. Comparative premises in Smethwick with an extended lease were worth £171,800. The mid-range ground rent payable was £55 invoiced per annum. The lease ran out on 22 June 2076. Considering the 50 years unexpired we estimated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 plus legals.
Dr W Lefebvre acquired a one bedroom apartment in Smethwick in July 1999. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Identical flats in Smethwick with an extended lease were valued around £280,000. The average amount of ground rent was £45 billed annually. The lease ran out on 17 April 2096. Having 70 years left we calculated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of professional charges.