Southam leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Most owners of residential leasehold property in Southam enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Southam you would be well advised to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Southam with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Southam,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Southam valuers.
Harrison owned a conversion apartment in Southam being marketed with a lease of a little over 59 years left. Harrison on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Harrison to invoke his statutory right. Harrison obtained expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Last month we were approach by Mr and Mrs. W Williams , who completed a basement apartment in Southam in May 1999. The question was if we could estimate the price would be for a 90 year lease extension. Comparable residencies in Southam with an extended lease were valued around £275,000. The mid-range ground rent payable was £55 invoiced yearly. The lease lapsed in 2102. Having 76 years left we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of legals.
In 2012 we were phoned by Mrs Maisie Jackson who, having completed a purpose-built flat in Southam in November 2000. The dilemma was if we could estimate the price would be for a ninety year extension to my lease. Identical premises in Southam with 100 year plus lease were in the region of £176,200. The average ground rent payable was £65 collected quarterly. The lease elapsed on 5 January 2082. Having 56 years remaining we approximated the premium to the freeholder for the lease extension to be within £29,500 and £34,000 exclusive of professional charges.