Rednal leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Rednal tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Rednal you must investigate if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with procure Rednal 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 lawyer we work with provide it.
Off the back of unsuccessful correspondence with the freeholder of her garden flat in Rednal, Isabella commenced the lease extension process as the 80 year deadline was rapidly approaching. The transaction completed in April 2011. The landlord’s costs were negotiated to less than 450 GBP.
In 2013 we were phoned by Dr Rory Adams who, having was assigned a lease of a ground floor apartment in Rednal in September 2011. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparable premises in Rednal with 100 year plus lease were valued about £189,000. The average amount of ground rent was £55 collected annually. The lease ended on 16 April 2078. Considering the 53 years remaining we calculated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of professional charges.
Last Summer we were contacted by Mr and Mrs. C Petit , who took over the lease of a purpose-built flat in Rednal in March 2011. The dilemma was if we could approximate the premium could be to prolong the lease by ninety years. Comparable premises in Rednal with an extended lease were worth £290,000. The mid-range amount of ground rent was £45 invoiced annually. The lease lapsed on 20 January 2099. Considering the 74 years left we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 plus legals.