Kings Norton 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 gets more expensive. It is the case that most Kings Norton tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Kings Norton you would be well advised to check if your lease has between 70 and 90 years remaining. There are compelling reasons why a Kings Norton flat owner with a lease having around 80 years remaining should take steps to make sure that a lease extension is actioned without delay
Leasehold premises in Kings Norton with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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 lawyers that we work with undertake Kings Norton 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 conveyancing solicitor we work with provide it.
Off the back of protracted correspondence with the landlord of her two bedroom apartment in Kings Norton, Chantelle commenced the lease extension process as the eighty year mark was rapidly approaching. The legal work was concluded in June 2015. The freeholder’s costs were kept to an absolute minimum.
Last Summer we were contacted by Mr and Mrs. C Clarke , who was assigned a lease of a studio apartment in Kings Norton in July 1999. The question was if we could approximate the premium would be for a ninety year extension to my lease. Comparative premises in Kings Norton with 100 year plus lease were valued around £295,000. The average amount of ground rent was £50 invoiced monthly. The lease lapsed in 2101. Having 75 years outstanding we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 plus fees.
In 2010 we were e-mailed by Mr and Mrs. E James who, having owned a garden flat in Kings Norton in April 2012. We are asked if we could shed any light on how much (approximately) price could be for a 90 year extension to my lease. Identical flats in Kings Norton with a long lease were valued about £250,400. The mid-range ground rent payable was £65 invoiced every twelve months. The lease end date was in 2090. Given that there were 64 years left we calculated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 not including professional charges.