The market value of a leasehold property in Tamworth depends on how many years the lease has remaining. If it is near to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. Ideally one should start the lease extension process when a lease still has 82 years remaining so that all matters can be finalised ahead of the eighty year mark. Current legislation entitles Tamworth qualifying lessees to acquire a lease extension of 90 years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Tamworth with more than 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 circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Regardless of whether you are a tenant or a landlord 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.
Half a year ago Adam, started to get close to the 80-year mark with the lease on his first floor flat in Tamworth. Having purchased his property 18 years previously, the length of the lease was of minimal concern. Fortunately, he realised he would imminently be paying an inflated amount for Extending the lease. Adam arranged for a lease extension just ahead of time last June. Adam and the landlord ultimately agreed on an amount of £6,000 . If he failed to meet the deadline, the sum would have escalated by a minimum £900.
In 2012 we were contacted by Mr Tommy Alexander who, having completed a first floor apartment in Tamworth in April 2001. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Similar flats in Tamworth with an extended lease were worth £205,000. The average amount of ground rent was £50 invoiced annually. The lease terminated in 2103. Considering the 78 years left we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.
Dr O González took over the lease of a purpose-built flat in Tamworth in March 2002. The dilemma was if we could approximate the price would likely be to extend the lease by ninety years. Comparative homes in Tamworth with a long lease were in the region of £267,600. The mid-range ground rent payable was £65 invoiced per annum. The lease terminated in 2092. Given that there were 67 years left we calculated the premium to the freeholder for the lease extension to be within £14,300 and £16,400 exclusive of legals.