When it comes to domestic leasehold property in Smethwick, you are actually purchasing an entitlement to reside in a property for a prescribed time frame. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should consider extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive especially once there are fewer than eighty years remaining. Leasehold owners in Smethwick with a lease nearing 81 years left should seriously consider extending it sooner rather than later. Once a lease has under 80 years remaining, under the relevant statute the freeholder can calculate and levy a larger premium, assessed on a technical calculation, strangely termed as “marriage value” which is due.
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Smethwick 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 conveyancer we work with provide it.
Last year Evan, started to get near to the eighty-year threshold with the lease on his studio apartment in Smethwick. In buying his flat two decades ago, the length of the lease was of minimal significance. As luck would have it, he noticed he would soon be paying way over the odds for Extending the lease. Evan extended the lease just under the wire in July. Evan and the landlord subsequently settled on the final figure of £5,500 . If he failed to meet the deadline, the premium would have escalated by a minimum £1,075.
In 2012 we were e-mailed by Ms Kirsty Young who, having owned a garden apartment in Smethwick in September 2008. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by ninety years. Similar homes in Smethwick with 100 year plus lease were valued about £181,600. The average ground rent payable was £55 invoiced monthly. The lease end date was on 28 September 2077. Considering the 52 years outstanding we estimated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 exclusive of legals.
Last Autumn we were called by Mrs Lauren Clark , who was assigned a lease of a studio flat in Smethwick in March 2009. We are asked if we could estimate the premium would likely be to extend the lease by an additional years. Comparative homes in Smethwick with a long lease were worth £285,000. The mid-range amount of ground rent was £45 billed annually. The lease ended in 2097. Given that there were 72 years left we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of legals.