Kings Heath 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 becomes more expensive. It is the case that most Kings Heath 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 Kings Heath you would be well advised to investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Lease extensions in Kings Heath can be a difficult process. We recommend you procure guidance from a conveyancer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Kings Heath lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Adam owned a 2 bedroom flat in Kings Heath on the market with a lease of a few days over 59 years remaining. Adam informally contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 annually. Ordinarily, ground rent would not be payable on a lease extension were Adam to exercise his statutory right. Adam obtained expert advice and was able to make a more informed judgement and handle with the matter and readily saleable.
Last Summer we were called by Mr and Mrs. Y Clarke , who purchased a garden flat in Kings Heath in November 1998. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Comparative residencies in Kings Heath with an extended lease were valued around £233,200. The mid-range amount of ground rent was £60 billed quarterly. The lease came to a finish in 2086. Taking into account 61 years left we estimated the premium to the landlord to extend the lease to be between £22,800 and £26,400 exclusive of expenses.
In 2012 we were phoned by Mr Harvey King who, having completed a ground floor flat in Kings Heath in September 2005. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Similar residencies in Kings Heath with 100 year plus lease were valued around £174,200. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease lapsed in 2076. Considering the 51 years unexpired we approximated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 plus costs.