The re-sale value of a leasehold property in Bredon depends on how many years the lease has left to run. If it is near to or fewer than eighty years you should expect difficulties on re-sale, so it is advisable to arrange for a lease extension before buying. Ideally one should start the process of extending the lease is when the lease still has 82 years remaining so that all matters can be addressed in advance of the 80 year threshold. Current legislation entitles Bredon qualifying lessees to a ninety year extension added to their remaining lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be worth the same as 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; |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Bredon can be a difficult process. We recommend you get professional help from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Bredon lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Jude, started to get close to the eighty-year threshold with the lease on his first floor flat in Bredon. In buying his home 18 years ago, the length of the lease was of little importance. Thankfully, he recognised he would imminently be paying an inflated amount for a lease extension. Jude was able to extend his lease just ahead of time last June. Jude and the landlord who owned the flat above subsequently settled on a premium of £5,500 . If the lease had fallen lower than eighty years, the price would have increased by a minimum £1,025.
In 2010 we were e-mailed by Mr and Mrs. V Torres who, having completed a newly refurbished apartment in Bredon in May 1997. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by 90 years. Comparative residencies in Bredon with a long lease were valued about £295,000. The average ground rent payable was £45 invoiced every twelve months. The lease finished on 1 September 2100. Taking into account 74 years as a residual term we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including costs.
Mr and Mrs. K Cox was assigned a lease of a first floor apartment in Bredon in January 1999. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Similar homes in Bredon with 100 year plus lease were in the region of £248,000. The average ground rent payable was £65 billed every twelve months. The lease finished on 22 May 2089. Considering the 63 years remaining we approximated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of costs.