Tamworth leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Most owners of residential leasehold property in Tamworth enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Tamworth you really ought to investigate if your lease has between 70 and ninety years left. There are good reasons why a Tamworth leaseholder with a lease having around 80 years left should take action to make sure that a lease extension is actioned without delay
Leasehold premises in Tamworth with in excess of one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Tamworth,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Tamworth valuers.
Finn owned a conversion apartment in Tamworth on the market with a lease of fraction over 72 years remaining. Finn on an informal basis approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Finn to invoke his statutory right. Finn obtained expert legal guidance and secured satisfactory resolution informally and sell the property.
Mr H Bell bought a first floor flat in Tamworth in October 2010. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Similar flats in Tamworth with 100 year plus lease were valued around £210,000. The average amount of ground rent was £50 billed quarterly. The lease ran out in 2106. Given that there were 80 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 plus legals.
Last Spring we were contacted by Dr S Ricardo , who purchased a garden apartment in Tamworth in August 1997. The dilemma was if we could approximate the price could be for a ninety year extension to my lease. Comparable homes in Tamworth with 100 year plus lease were valued about £280,000. The average ground rent payable was £45 invoiced annually. The lease expired in 2095. Having 69 years left we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including expenses.