The market value of a leasehold property in Branston depends on how many years the lease has remaining. If it is close to or fewer than 80 years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years unexpired so that all matters can be addressed in advance of the 80 year mark. Current legislation enables Branston qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of ninety years. The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to 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; |
| 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. |
| Godiva Mortgages | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with handle Branston 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.
Last October Austin, started to get close to the 80-year threshold with the lease on his leasehold apartment in Branston. Having purchased his home two decades ago, the unexpired term was of minimal concern. As luck would have it, he realised he needed to take steps soon on a lease extension. Austin was able to extend his lease just in the nick of time last August. Austin and the landlord who owned the flat above eventually settled on a premium of £6,000 . If he had missed the deadline, the amount would have increased by a minimum £1,125.
Last Summer we were called by Dr Muhammad François , who was assigned a lease of a garden flat in Branston in October 2000. The dilemma was if we could approximate the premium could be to extend the lease by a further 90 years. Similar premises in Branston with a long lease were worth £200,800. The mid-range amount of ground rent was £65 collected every twelve months. The lease finished on 20 November 2086. Given that there were 60 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £20,900 and £24,200 exclusive of legals.
Mrs Lydia Jackson completed a first floor flat in Branston in January 2007. The question was if we could estimate the compensation to the landlord would likely be for a 90 year extension to my lease. Identical properties in Branston with a long lease were worth £255,000. The mid-range amount of ground rent was £50 billed annually. The lease termination date was on 7 August 2097. Considering the 71 years remaining we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of legals.