With a residential leasehold premises in Willenhall, you effectively rent it for a certain amount of time. Modern flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are fewer than eighty years remaining. Leasehold owners in Willenhall with a lease drawing near to 81 years unexpired should seriously think of extending it sooner as opposed to later. Once the lease term has less than eighty years outstanding, under the relevant legislation the freeholder can calculate and charge a larger premium, based on a technical multiplication, known as “marriage value” which is payable.
It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Halifax | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancing solicitors that we work with handle Willenhall 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.
Aiden owned a 2 bedroom apartment in Willenhall being sold with a lease of fraction over fifty eight years left. Aiden informally approached his landlord being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Aiden to exercise his statutory right. Aiden procured expert advice and secured satisfactory resolution without going to tribunal and readily saleable.
In 2012 we were phoned by Mr and Mrs. M King who, having moved into a basement flat in Willenhall in July 2011. The question was if we could estimate the price could be to prolong the lease by an additional years. Comparable residencies in Willenhall with 100 year plus lease were valued around £270,000. The mid-range amount of ground rent was £55 collected annually. The lease end date was on 27 April 2099. Taking into account 74 years remaining we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.
In 2013 we were contacted by Ms G Gray who, having owned a ground floor apartment in Willenhall in January 2012. The question was if we could approximate the premium would be to extend the lease by a further 90 years. Similar flats in Willenhall with an extended lease were in the region of £166,400. The average amount of ground rent was £60 collected every twelve months. The lease termination date was in 2079. Considering the 54 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £32,300 and £37,400 exclusive of costs.