Braintree leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Braintree 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 Braintree you would be well advised to investigate if your lease has between seventy and ninety years left. There are good reasons why a Braintree flat owner with a lease having around 80 years unexpired should take action to make sure that a lease extension is effected without delay
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 undertake Braintree 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.
Omar owned a high value apartment in Braintree on the market with a lease of fraction over 61 years remaining. Omar informally spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 per annum. Ordinarily, ground rent would not be payable on a lease extension were Omar to exercise his statutory right. Omar procured expert advice and secured satisfactory resolution without resorting to tribunal and sell the property.
Dr R Sharif owned a first floor flat in Braintree in February 2005. The question was if we could approximate the premium could be for a ninety year extension to my lease. Similar flats in Braintree with a long lease were valued about £265,000. The mid-range ground rent payable was £50 invoiced monthly. The lease elapsed on 5 April 2098. Considering the 73 years outstanding we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus fees.
Mr and Mrs. M Garcia purchased a one bedroom flat in Braintree in September 2009. The question was if we could estimate the price would be to prolong the lease by a further 90 years. Identical properties in Braintree with a long lease were valued around £264,000. The average ground rent payable was £60 billed quarterly. The lease lapsed in 2078. Taking into account 53 years remaining we approximated the premium to the freeholder to extend the lease to be within £37,100 and £42,800 exclusive of legals.