Braintree leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Most owners of residential leasehold property in Braintree enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Braintree you really ought to see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold premises in Braintree with in excess of one hundred years unexpired 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 property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Braintree can be a difficult process. We recommend you obtain professional help from a lawyer and valuer with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Braintree lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Off the back of unsuccessful discussions with the landlord of her purpose-built apartment in Braintree, Eleanor commenced the lease extension process as the 80 year deadline was rapidly nearing. The legal work completed in January 2014. The freeholder’s fees were restricted to less than 600 GBP.
Mr and Mrs. E Rodríguez bought a one bedroom apartment in Braintree in August 1999. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Comparative premises in Braintree with an extended lease were valued about £280,000. The average ground rent payable was £55 billed quarterly. The lease ran out in 2103. Given that there were 78 years left we approximated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 not including professional charges.
In 2011 we were approached by Mr and Mrs. K González who, having was assigned a lease of a basement flat in Braintree in July 2003. We are asked if we could shed any light on how much (approximately) price would likely be to extend the lease by an additional years. Comparable properties in Braintree with 100 year plus lease were valued around £191,000. The average ground rent payable was £65 billed monthly. The lease terminated on 24 April 2083. Given that there were 58 years outstanding we estimated the premium to the landlord for the lease extension to be within £23,800 and £27,400 plus legals.