The market value of Bridgnorth 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 substantially once the unexpired lease term is less than 80 years
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with undertake Bridgnorth 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.
Off the back of lengthy correspondence with the freeholder of her purpose-built apartment in Bridgnorth, Rachael commenced the lease extension process just as her lease was approaching the all-important 80-year threshold. The lease extension was finalised in August 2012. The freeholder’s fees were restricted to approximately six hundred pounds.
Mr and Mrs. E Lee owned a purpose-built flat in Bridgnorth in October 2000. We are asked if we could estimate the price would be to extend the lease by ninety years. Identical premises in Bridgnorth with an extended lease were worth £233,200. The average amount of ground rent was £60 invoiced per annum. The lease terminated in 2086. Taking into account 61 years left we estimated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 plus fees.
In 2012 we were approached by Mr and Mrs. M Hernández who, having owned a newly refurbished flat in Bridgnorth in August 1999. The dilemma was if we could approximate the premium could be to prolong the lease by 90 years. Similar homes in Bridgnorth with a long lease were valued around £171,800. The mid-range amount of ground rent was £55 invoiced yearly. The lease terminated on 22 January 2075. Given that there were 50 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £33,300 and £38,400 not including fees.