When it comes to domestic leasehold property in Bradford, you are actually purchasing an entitlement to live in a property for a prescribed time frame. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive particularly when there are less than 80 years remaining. Residents in Bradford with a lease nearing 81 years left should seriously consider extending it sooner as opposed to later. Once the lease term has under 80 years remaining, under the relevant statute the landlord is entitled to calculate and charge a larger premium, based on a technical multiplication, strangely termed as “marriage value” which is payable.
Leasehold properties in Bradford with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
| 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. |
Retaining our service gives you better control over the value of your Bradford leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Daniel, came perilously near to the 80-year mark with the lease on his two bedroom apartment in Bradford. In buying his property twenty years previously, the lease term was of little importance. Luckily, he noticed he needed to take steps soon on a lease extension. Daniel was able to extend his lease at the eleventh hour in March. Daniel and the landlord who owned the flat above ultimately settled on a premium of £5,000 . If he had missed the deadline, the price would have increased by at least £1,125.
In 2014 we were approached by Mrs Bethan Girard who, having took over the lease of a garden flat in Bradford in June 2012. The dilemma was if we could estimate the premium would likely be to prolong the lease by a further 90 years. Similar residencies in Bradford with a long lease were worth £223,400. The average amount of ground rent was £60 billed per annum. The lease elapsed on 4 September 2085. Considering the 59 years left we approximated the compensation to the landlord to extend the lease to be within £27,600 and £31,800 not including fees.
In 2014 we were contacted by Ms C Rodríguez who, having acquired a studio apartment in Bradford in September 1995. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Identical premises in Bradford with a long lease were in the region of £210,000. The average ground rent payable was £50 invoiced monthly. The lease elapsed in 2106. Having 80 years unexpired we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 not including professional charges.