Southam leases on residential properties are gradually losing value. Where your lease has about ninety years left, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for your lease extension to take place before the term of the current lease drops lower than 80 years - otherwise a higher premium will be due. Leasehold owners in Southam will mostly qualify for a lease extension; however a solicitor should be able check if you qualify. In some cases you may not be entitled. There are prescribed deadlines and steps to comply with once the process has started so it’s sensible to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Chelsea 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. |
| Coventry Building Society | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you better control over the value of your Southam leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Milo owned a high value apartment in Southam being marketed with a lease of a little over 61 years remaining. Milo on an informal basis approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Milo to invoke his statutory right. Milo procured expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
Last Winter we were approach by Ms E Wright , who moved into a one bedroom flat in Southam in October 2006. The dilemma was if we could approximate the premium would be to prolong the lease by 90 years. Similar residencies in Southam with 100 year plus lease were valued around £270,000. The average ground rent payable was £55 invoiced per annum. The lease came to a finish on 15 March 2100. Given that there were 74 years unexpired we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.
Mr and Mrs. O James owned a purpose-built apartment in Southam in April 2008. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar residencies in Southam with an extended lease were worth £166,400. The mid-range amount of ground rent was £60 invoiced yearly. The lease came to a finish in 2080. Given that there were 54 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £32,300 and £37,400 not including expenses.