Tunstall leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Tunstall tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Tunstall you really ought to check if your lease has between 70 and ninety years left. There are good reasons why a Tunstall leaseholder with a lease having around 80 years left should take steps to ensure that a lease extension is effected without delay
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with procure Tunstall 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.
Last year Kai, came very near to the eighty-year mark with the lease on his ground floor flat in Tunstall. In buying his flat 18 years ago, the lease term was of little concern. Luckily, he recognised he needed to take action soon on a lease extension. Kai arranged for a lease extension just ahead of time in August. Kai and the landlord who owned the flat above ultimately agreed on a premium of £5,500 . If he had missed the deadline, the price would have escalated by at least £1,150.
Last Spring we were contacted by Dr Morgan Lewis , who moved into a studio flat in Tunstall in September 2009. The dilemma was if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Similar homes in Tunstall with a long lease were worth £208,600. The average ground rent payable was £60 collected quarterly. The lease expired on 20 September 2082. Considering the 57 years left we calculated the premium to the landlord for the lease extension to be within £30,400 and £35,200 not including professional charges.
In 2010 we were approached by Dr Sophie Thomas who, having owned a basement flat in Tunstall in August 2001. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Similar residencies in Tunstall with 100 year plus lease were valued around £200,000. The mid-range ground rent payable was £50 collected annually. The lease expired in 2102. Considering the 77 years remaining we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of legals.