It’s a harsh certainty that a Rednal residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Rednal property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below eighty years - otherwise a higher amount will be due. Most flat owners in Rednal will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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 |
Irrespective of whether you are a tenant or a freeholder in Rednal,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Rednal valuers.
Trailing protracted discussions with the freeholder of her first floor flat in Rednal, Rachael started the lease extension process as the eighty year threshold was swiftly advancing. The legal work was finalised in August 2008. The freeholder’s fees were kept to an absolute minimum.
Last Autumn we were called by Mr and Mrs. E Brown , who acquired a studio apartment in Rednal in April 1996. The dilemma was if we could approximate the price would be for a ninety year extension to my lease. Comparative premises in Rednal with a long lease were in the region of £225,800. The average ground rent payable was £60 invoiced every twelve months. The lease elapsed on 18 November 2085. Taking into account 60 years left we calculated the premium to the landlord to extend the lease to be between £25,700 and £29,600 plus expenses.
Dr Ibrahim Campbell acquired a first floor flat in Rednal in November 2011. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparative residencies in Rednal with a long lease were in the region of £210,000. The average ground rent payable was £50 billed yearly. The lease lapsed on 1 March 2105. Having 80 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus legals.