If you are facing a significant premium because your lease in Kingstanding has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to start your Kingstanding lease extension today:
A Kingstanding leasehold property depreciates with the years remaining on the lease.
Kingstanding leases on domestic deteriorating in value. Where your lease has in the region of ninety years unexpired, you should start considering the need for a lease extension. 80 years is a significant number: when the unexpired term of a lease falls below this level then you start paying an additional element called marriage value. Flat owners in Kingstanding will mostly be legally entitled to a lease extension; however a solicitor will check your eligibility. In some cases you may not be entitled. There are also strict timetables and formalities to follow once the process is initiated so it’s best to be guided by a conveyancer during the process.
Kingstanding property with a lease extension is almost the same value as a freehold
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
Mortgage lenders may decide not to lend with a short lease
Banks and Building Societies are less likely to issue a loan offer on a residential property in Kingstanding with a short lease. Many lenders simply refuse a mortgage on leases with less than 75 years left.
| Lender |
Requirement
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| 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.
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| Barnsley Building Society |
60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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| Birmingham Midshires |
Minimum 70 years from the date of the mortgage.
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| Godiva Mortgages |
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.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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Why use us for your lease extension in Kingstanding?
The lawyers that we work with undertake Kingstanding 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.
Kingstanding Lease Extension Example Cases:
Eli, Kingstanding, Birmingham
Last October Eli, came precariously close to the 80-year threshold with the lease on his studio apartment in Kingstanding. In buying his flat two decades ago, the unexpired term was of minimal importance. Luckily, he recognised he would imminently be paying an inflated amount for a lease extension. Eli extended the lease at the eleventh hour last September. Eli and the freeholder via the management company ultimately settled on sum of £6,000 . If he failed to meet the deadline, the amount would have gone up by a minimum £875.
Kingstanding case:
Mr and Mrs. L Martinez acquired a one bedroom flat in Kingstanding in May 2011. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Identical residencies in Kingstanding with an extended lease were in the region of £205,000. The average ground rent payable was £50 collected annually. The lease finished in 2104. Considering the 78 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
Kingstanding case:
In 2011 we were e-mailed by Mr and Mrs. U Ramírez who, having moved into a one bedroom apartment in Kingstanding in August 2001. The question was if we could estimate the price would likely be to extend the lease by a further 90 years. Comparative residencies in Kingstanding with a long lease were in the region of £267,600. The average ground rent payable was £65 billed annually. The lease concluded in 2093. Taking into account 67 years unexpired we calculated the premium to the landlord to extend the lease to be between £14,300 and £16,400 not including professional charges.