For anyone whose Woodhouse and Handsworth flat is held on a long lease, the message is clear – if you do nothing, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to obtain a lease extension.
Leasehold premises in Woodhouse and Handsworth with over one hundred 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 property. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Woodhouse and Handsworth,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Woodhouse and Handsworth valuers.
Last October Muhammad, started to get close to the eighty-year mark with the lease on his one bedroom apartment in Woodhouse and Handsworth. Having bought his home 18 years ago, the length of the lease was of minimal interest. Luckily, he became aware that he would imminently be paying an inflated amount for a lease extension. Muhammad was able to extend his lease just under the wire in April. Muhammad and the freeholder ultimately settled on a premium of £6,000 . If the lease had slid to less than 80 years, the premium would have escalated by at least £925.
Last month we were phoned by Mrs Kate Smith , who purchased a basement flat in Woodhouse and Handsworth in April 1997. The question was if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Identical residencies in Woodhouse and Handsworth with an extended lease were in the region of £176,200. The average amount of ground rent was £65 invoiced yearly. The lease lapsed on 5 November 2082. Having 56 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £29,500 and £34,000 not including fees.
Mr N Scott acquired a studio flat in Woodhouse and Handsworth in October 2012. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Comparable flats in Woodhouse and Handsworth with an extended lease were worth £242,600. The average ground rent payable was £45 billed quarterly. The lease terminated in 2093. Given that there were 67 years unexpired we estimated the premium to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of legals.