It’s an underpublicised certainty that a Rednal residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Rednal property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If the number of years remaining drops below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Rednal will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 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 |
|---|---|
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 conveyancers that we work with undertake 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 conveyancer we work with provide it.
In 2014 Ollie, came dangerously near to the eighty-year threshold with the lease on his ground floor flat in Rednal. In buying his flat two decades ago, the lease term was of little bearing. Fortunately, he noticed he needed to take steps soon on a lease extension. Ollie was able to extend his lease just in the nick of time last May. Ollie and the freeholder subsequently settled on a premium of £5,500 . If the lease had descended below 80 years, the price would have increased by a minimum £1,125.
Last Spring we were phoned by Dr Austin García , who purchased a one bedroom flat in Rednal in April 2008. We are asked if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Similar residencies in Rednal with 100 year plus lease were in the region of £205,000. The average amount of ground rent was £50 billed annually. The lease terminated in 2104. Considering the 79 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £7,600 and £8,800 exclusive of fees.
In 2012 we were approached by Mr H Lewis who, having was assigned a lease of a garden flat in Rednal in February 1995. We are asked if we could approximate the price could be for a 90 year extension to my lease. Identical properties in Rednal with 100 year plus lease were worth £270,000. The average amount of ground rent was £65 billed monthly. The lease expired on 28 August 2093. Having 68 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including costs.