It’s a harsh truth that a Breaston residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Breaston property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term dips under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Breaston will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Engaging our service gives you enhanced control over the value of your Breaston leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jack was the the leasehold owner of a conversion flat in Breaston being sold with a lease of fraction over 72 years outstanding. Jack on an informal basis approached his landlord a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Jack to exercise his statutory right. Jack obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and sell the property.
Last Winter we were contacted by Ms P Sharif , who acquired a one bedroom flat in Breaston in January 2007. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Comparable homes in Breaston with a long lease were valued around £173,800. The average amount of ground rent was £65 collected yearly. The lease finished in 2080. Having 55 years outstanding we calculated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 plus professional charges.
Last May we were e-mailed by Ms J David , who acquired a purpose-built flat in Breaston in May 2011. The question was if we could approximate the premium would be for a ninety year extension to my lease. Similar homes in Breaston with 100 year plus lease were in the region of £235,200. The mid-range ground rent payable was £45 invoiced quarterly. The lease concluded in 2091. Having 66 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 plus professional charges.