Whitefield leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Whitefield tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Whitefield you should check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold premises in Whitefield with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancing solicitors that we work with undertake Whitefield 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 lawyer we work with provide it.
Last year Alexander, came precariously close to the 80-year threshold with the lease on his first floor apartment in Whitefield. In buying his flat two decades ago, the length of the lease was of minimal interest. As luck would have it, he became aware that he would soon be paying way over the odds for Extending the lease. Alexander arranged for a lease extension at the eleventh hour in June. Alexander and the freeholder via the management company subsequently agreed on the final figure of £5,500 . If he not met the deadline, the figure would have increased by at least £1,050.
In 2013 we were e-mailed by Mrs K Bernard who, having purchased a basement flat in Whitefield in October 2003. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Identical properties in Whitefield with an extended lease were in the region of £225,800. The mid-range ground rent payable was £60 collected annually. The lease expired in 2086. Given that there were 60 years outstanding we estimated the premium to the freeholder for the lease extension to be within £25,700 and £29,600 plus professional charges.
In 2013 we were approached by Dr Joshua Parker who, having was assigned a lease of a first floor flat in Whitefield in February 2005. We are asked if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparable premises in Whitefield with a long lease were worth £210,000. The average amount of ground rent was £50 collected annually. The lease elapsed in 2106. Having 80 years unexpired we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus professional charges.