When it comes to long leasehold premises in Brading, you effectively rent it for a certain period of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater especially once there are less than 80 years remaining. Residents in Brading with a lease nearing 81 years left should seriously think of extending it sooner than later. When the lease term has less than 80 years outstanding, under the relevant statute the freeholder is entitled to calculate and levy a larger amount, assessed on a technical calculation, known as “marriage value” which is due.
Leasehold properties in Brading with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
The conveyancing solicitors that we work with undertake Brading 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.
Alfie was the the leasehold proprietor of a studio flat in Brading on the market with a lease of a few days over 59 years remaining. Alfie informally spoke with his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Alfie to exercise his statutory right. Alfie obtained expert advice and secured satisfactory deal without going to tribunal and sell the property.
Last Autumn we were phoned by Dr A Simon , who acquired a newly refurbished flat in Brading in August 1998. The question was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Identical residencies in Brading with a long lease were in the region of £216,000. The average ground rent payable was £60 invoiced per annum. The lease elapsed in 2083. Given that there were 58 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of expenses.
In 2013 we were contacted by Dr C Morgan who, having owned a one bedroom flat in Brading in November 2001. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Comparative flats in Brading with an extended lease were worth £205,000. The mid-range ground rent payable was £50 invoiced per annum. The lease terminated in 2103. Considering the 78 years outstanding we calculated the premium to the freeholder to extend the lease to be between £7,600 and £8,800 not including expenses.