The market value of Rednal 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 escalate significantly once the unexpired lease term is below than 80 years
Leasehold residencies in Rednal with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start 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 |
| 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. |
Engaging our service will provide you increased control over the value of your Rednal leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Joseph owned a studio flat in Rednal on the market with a lease of fraction over 61 years remaining. Joseph informally contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 yearly. Ordinarily, ground rent would not be payable on a lease extension were Joseph to exercise his statutory right. Joseph procured expert advice and was able to make an informed decision and deal with the matter and readily saleable.
In 2012 we were phoned by Dr H Lefebvre who, having moved into a purpose-built flat in Rednal in August 1997. The dilemma was if we could estimate the premium would be for a 90 year lease extension. Similar homes in Rednal with a long lease were in the region of £184,000. The average amount of ground rent was £55 billed every twelve months. The lease expiry date was in 2079. Given that there were 53 years left we calculated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 not including legals.
Mr James Ali was assigned a lease of a studio flat in Rednal in November 2007. The question was if we could estimate the premium would be to extend the lease by a further 90 years. Similar flats in Rednal with 100 year plus lease were in the region of £290,000. The average amount of ground rent was £45 collected quarterly. The lease end date was on 28 April 2099. Given that there were 73 years outstanding we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of expenses.