For anyone whose Bramhall home is held on a long lease, our message is clear – if no remedial action is taken, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| 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 undertake Bramhall 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.
Rory was the the leasehold proprietor of a conversion apartment in Bramhall being marketed with a lease of fraction over sixty years unexpired. Rory informally contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Rory to exercise his statutory right. Rory procured expert legal guidance and secured satisfactory deal without resorting to tribunal and sell the flat.
In 2010 we were called by Ms Ashleigh James who, having purchased a ground floor apartment in Bramhall in August 2002. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Comparative premises in Bramhall with an extended lease were in the region of £176,200. The average ground rent payable was £65 invoiced per annum. The lease expired on 6 May 2081. Taking into account 56 years left we estimated the compensation to the freeholder to extend the lease to be within £29,500 and £34,000 not including expenses.
In 2013 we were contacted by Mr Aaron Jones who, having was assigned a lease of a ground floor apartment in Bramhall in May 1995. The dilemma was if we could approximate the premium would likely be to extend the lease by 90 years. Comparable homes in Bramhall with an extended lease were valued around £242,600. The mid-range amount of ground rent was £45 collected annually. The lease terminated on 15 August 2092. Taking into account 67 years unexpired we calculated the compensation to the landlord for the lease extension to be within £11,400 and £13,200 not including expenses.