Unfortunately that a Bradford residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Bradford property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term falls under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in Bradford will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
The conveyancers that we work with handle Bradford 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 conveyancing solicitor we work with provide it.
Trailing lengthy discussions with the landlord of her ground floor apartment in Bradford, Erin initiated the lease extension process as the 80 year deadline was quickly advancing. The transaction was finalised in September 2010. The freeholder’s costs were kept to an absolute minimum.
Last Spring we were called by Dr S Richardson , who completed a purpose-built apartment in Bradford in August 1996. The dilemma was if we could approximate the premium could be to extend the lease by ninety years. Similar flats in Bradford with an extended lease were valued around £260,200. The average ground rent payable was £65 invoiced monthly. The lease ran out on 27 January 2092. Having 66 years remaining we estimated the compensation to the freeholder to extend the lease to be between £16,200 and £18,600 exclusive of legals.
In 2010 we were contacted by Mr F François who, having moved into a ground floor apartment in Bradford in October 1996. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Identical premises in Bradford with 100 year plus lease were worth £198,800. The average ground rent payable was £55 invoiced yearly. The lease ran out on 9 March 2081. Having 55 years left we calculated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 not including costs.