Bramford residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a period of years.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before 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. |
The lawyers that we work with procure Bramford 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 lawyer we work with provide it.
Jason owned a studio apartment in Bramford being sold with a lease of just over 59 years unexpired. Jason informally contacted his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £125 per annum. No ground rent would be due on a lease extension were Jason to exercise his statutory right. Jason obtained expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2014 we were e-mailed by Ms Robyn Mercier who, having moved into a one bedroom apartment in Bramford in September 1995. We are asked if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative homes in Bramford with an extended lease were in the region of £166,400. The mid-range ground rent payable was £60 invoiced per annum. The lease termination date was on 4 March 2080. Given that there were 54 years left we approximated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 plus costs.
Dr U Sharif purchased a recently refurbished apartment in Bramford in March 2011. The question was if we could approximate the price would likely be to extend the lease by an additional years. Similar residencies in Bramford with an extended lease were in the region of £232,800. The average amount of ground rent was £45 billed every twelve months. The lease lapsed on 11 November 2091. Taking into account 65 years as a residual term we estimated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including expenses.