Unfortunately that a Bredbury residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Bredbury property market.Where your lease has approximately ninety years left, you should start considering a lease extension. If the number of years remaining slips under 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Bredbury will be able to extend under the legislation; however a conveyancer should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold premises in Bredbury with over one hundred 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 property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Bredbury 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.
After lengthy correspondence with the landlord of her one bedroom apartment in Bredbury, Jodie started the lease extension process as the 80 year deadline was fast advancing. The lease extension was concluded in August 2014. The freeholder’s costs were kept to an absolute minimum.
In 2013 we were e-mailed by Mrs C Turner who, having was assigned a lease of a purpose-built flat in Bredbury in January 1997. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by 90 years. Similar flats in Bredbury with 100 year plus lease were worth £216,000. The average amount of ground rent was £60 collected monthly. The lease finished on 3 March 2083. Having 58 years unexpired we calculated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 plus professional charges.
Mr V David owned a garden flat in Bredbury in August 2000. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Comparable premises in Bredbury with a long lease were valued about £205,000. The average ground rent payable was £50 billed per annum. The lease expired on 25 February 2103. Having 78 years left we approximated the premium to the landlord for the lease extension to be within £7,600 and £8,800 exclusive of fees.