Unfortunately that a Solihull residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Solihull property market.Once your lease gets to 85ish years, you should 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 falls lower than eighty years - otherwise a higher amount will be due. Most flat owners in Solihull will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold premises in Solihull with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The lawyers that we work with handle Solihull 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 conveyancing solicitor we work with provide it.
Trailing lengthy discussions with the freeholder of her two bedroom flat in Solihull, Rebecca initiated the lease extension process just as the lease was coming close to the critical 80-year threshold. The legal work completed in September 2006. The freeholder’s charges were kept to an absolute minimum.
Last year we were contacted by Mr and Mrs. M Wright , who took over the lease of a garden apartment in Solihull in August 2000. The dilemma was if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Comparative homes in Solihull with 100 year plus lease were in the region of £250,400. The average ground rent payable was £65 billed monthly. The lease elapsed in 2089. Considering the 64 years unexpired we approximated the compensation to the landlord to extend the lease to be within £19,000 and £22,000 not including fees.
Last Summer we were called by Mr and Mrs. M Gunderson , who purchased a purpose-built apartment in Solihull in March 2008. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Similar properties in Solihull with a long lease were valued around £189,000. The mid-range ground rent payable was £55 invoiced monthly. The lease finished in 2078. Having 53 years left we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus fees.