The market value of Kings Norton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the unexpired lease term is less than eighty years
Leasehold properties in Kings Norton with over 100 years outstanding 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 to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a landlord in Kings Norton,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Kings Norton valuers.
Reuben owned a studio apartment in Kings Norton on the market with a lease of just over 72 years unexpired. Reuben informally contacted his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Reuben to exercise his statutory right. Reuben obtained expert legal guidance and secured satisfactory resolution informally and readily saleable.
Last Winter we were e-mailed by Dr O Richardson , who completed a one bedroom flat in Kings Norton in August 1998. We are asked if we could shed any light on how much (roughly) price could be for a ninety year lease extension. Comparable flats in Kings Norton with 100 year plus lease were valued around £198,800. The mid-range ground rent payable was £55 collected yearly. The lease concluded on 14 June 2080. Having 55 years remaining we approximated the compensation to the freeholder to extend the lease to be between £33,300 and £38,400 plus professional charges.
Mrs Gemma François took over the lease of a ground floor apartment in Kings Norton in August 2003. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparable properties in Kings Norton with 100 year plus lease were valued about £295,000. The average amount of ground rent was £50 collected annually. The lease finished in 2100. Considering the 75 years remaining we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 plus expenses.