Bradford On Avon leases on residential properties are gradually losing value. Where your lease has about 90 years remaining, you should start considering the need for a lease extension. Eighty years is a significant number: when the remaining term of a lease drops below this level then you begin paying an additional element called marriage value. Flat owners in Bradford On Avon will mostly be legally entitled to a lease extension; however a solicitor will check your eligibility. In certain circumstances you may not be entitled. There are also strict deadlines and steps to comply with once the process is initiated so it’s sensible to be guided by a conveyancer during the process.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the residence 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| 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 lawyers that we work with undertake Bradford On Avon 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.
Subsequent to protracted negotiations with the landlord of her basement flat in Bradford On Avon, Niamh initiated the lease extension process just as the lease was coming close to the crucial eighty-year mark. The lease extension completed in February 2012. The landlord’s charges were kept to an absolute minimum.
Last Christmas we were contacted by Mr and Mrs. W Morel , who completed a one bedroom flat in Bradford On Avon in May 2012. We are asked if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparable properties in Bradford On Avon with a long lease were valued about £275,000. The average amount of ground rent was £45 billed per annum. The lease ran out in 2095. Taking into account 69 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 not including professional charges.
In 2010 we were contacted by Mr R Kelly who, having purchased a newly refurbished flat in Bradford On Avon in November 1998. The dilemma was if we could estimate the price would likely be for a ninety year extension to my lease. Comparable premises in Bradford On Avon with a long lease were valued around £216,000. The average amount of ground rent was £60 collected monthly. The lease finished on 4 October 2084. Considering the 58 years left we approximated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of fees.