Braintree Lease Extension - Free Consultation

Before you progress with your lease extension in Braintree
Get a quote from one of our lease extension experts with over 20 years experience.

Let them guide you for FREE on the various options available to you.

It may end up saving you thousands.

Main reasons to commence your Braintree lease extension


Top reasons for lease extension now:

Increase your lease and increase your Braintree property value

Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Braintree. Clearly, the period of lease left shortens over time. This is often ignored and only becomes a problem when the flat or house needs to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Braintree have the legal entitlement to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. You should give careful consideration before delaying your Braintree lease extension. Putting off that expense now only increases the price you will ultimately have to pay for a lease extension

Braintree property with a lease extension has roughly the same value as a freehold

Leasehold premises in Braintree with in excess of 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.

Lending institutions will not loan monies with a short lease

The trend since 2008 has been for lenders to tighten lending criteria across the board - this has extended to the property over which the mortgage is to be granted. This has meant the unexpired lease term required by lenders has increased. Historically banks would lend on a lease with twenty years plus the term of the loan - typically 50 year leases but those requirements have been chipped away by the requirement for lengthy leases - many use a minimum term of 75 years as standard.

Lender Requirement
Bank of Scotland Minimum 70 years from the date of the mortgage.
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.
The Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Originations (Will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to 5 years
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 0.5% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Originations):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Royal Bank of Scotland Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.

Get in touch with one of our Braintree lease extension solicitors or enfranchisement solicitors

The conveyancing solicitors 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 conveyancer we work with provide it.

Braintree Lease Extension Case Summaries:

Charlie, Braintree, Essex

Half a year ago Charlie, started to get near to the 80-year mark with the lease on his leasehold flat in Braintree. In buying his property two decades ago, the unexpired term was of minimal concern. by good luck, he became aware that he would soon be paying an inflated amount for Extending the lease. Charlie arranged for a lease extension just under the wire last April. Charlie and the freeholder eventually agreed on an amount of £5,000 . If he failed to meet the deadline, the sum would have increased by a minimum £875.

Braintree case:

Mr and Mrs. P Davis was assigned a lease of a purpose-built flat in Braintree in January 2001. We are asked if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Identical residencies in Braintree with 100 year plus lease were in the region of £265,000. The mid-range amount of ground rent was £50 billed per annum. The lease finished in 2095. Considering the 74 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of expenses.

Braintree case:

Last Spring we were called by Mr and Mrs. F Lefèvre , who moved into a recently refurbished apartment in Braintree in August 2000. The dilemma was if we could estimate the premium would likely be for a 90 year extension to my lease. Comparative homes in Braintree with a long lease were in the region of £166,400. The mid-range ground rent payable was £60 billed quarterly. The lease elapsed in 2075. Taking into account 54 years unexpired we approximated the compensation to the landlord for the lease extension to be between £32,300 and £37,400 not including fees.