Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will ordinarily be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Bramford. Clearly, the period of lease left reduces as time goes by. This may pass by relatively unnoticed when the residence has to be sold or refinanced. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Eligible leaseholders in Bramford have the legal entitlement to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. Do give due attention before putting off your Bramford lease extension. Putting off that expense now likely increases the price you will eventually incur to extend your lease
Leasehold residencies in Bramford with in excess of 100 years outstanding 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 purchasing 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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:
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Retaining our service will provide you increased control over the value of your Bramford leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Dexter was the the leasehold proprietor of a high value apartment in Bramford being sold with a lease of a little over sixty years left. Dexter on an informal basis spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Dexter to invoke his statutory right. Dexter procured expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Last Christmas we were e-mailed by Dr E Fournier , who bought a one bedroom apartment in Bramford in January 2011. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Comparative homes in Bramford with an extended lease were worth £176,200. The average ground rent payable was £65 invoiced yearly. The lease lapsed on 12 January 2082. Given that there were 56 years left we calculated the compensation to the freeholder for the lease extension to be within £29,500 and £34,000 plus fees.
Last Summer we were called by Dr G Davies , who was assigned a lease of a first floor flat in Bramford in March 2004. The question was if we could approximate the compensation to the landlord would likely be to extend the lease by an additional years. Similar residencies in Bramford with a long lease were worth £242,600. The average ground rent payable was £45 billed quarterly. The lease terminated in 2093. Considering the 67 years outstanding we calculated the premium to the freeholder to extend the lease to be within £11,400 and £13,200 plus costs.