Badminton leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Badminton tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Badminton you should check if your lease has between 70 and ninety years left. There are good reasons why a Badminton flat owner with a lease having around 80 years left should take action to make sure that a lease extension is put in place without delay
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to 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. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Badminton 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.
Last October Liam, started to get near to the 80-year mark with the lease on his first floor apartment in Badminton. In buying his flat two decades ago, the unexpired term was of little significance. Luckily, he recognised he would soon be paying an escalated premium for a lease extension. Liam was able to extend his lease just ahead of time in January. Liam and the freeholder via the managing agents subsequently agreed on the final figure of £5,000 . If the lease had dipped to less than 80 years, the premium would have escalated by a minimum £975.
In 2009 we were phoned by Dr N André who, having owned a basement apartment in Badminton in November 2003. We are asked if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Similar properties in Badminton with 100 year plus lease were valued around £240,600. The mid-range amount of ground rent was £60 collected monthly. The lease ended in 2088. Considering the 62 years remaining we approximated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 plus professional charges.
Last Christmas we were called by Mr and Mrs. B Vincent , who was assigned a lease of a basement apartment in Badminton in April 2011. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Similar premises in Badminton with 100 year plus lease were in the region of £174,200. The average amount of ground rent was £55 invoiced annually. The lease came to a finish in 2077. Having 51 years unexpired we calculated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of expenses.