Bredon leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Bredon residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Bredon you would be well advised to check if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you increased control over the value of your Bredon leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted discussions with the freeholder of her ground floor flat in Bredon, Olivia started the lease extension process as the 80 year deadline was fast approaching. The transaction was concluded in October 2013. The landlord’s costs were kept to an absolute minimum.
Mr and Mrs. A Stewart owned a ground floor flat in Bredon in May 2003. We are asked if we could estimate the premium could be for a ninety year lease extension. Comparative flats in Bredon with 100 year plus lease were worth £189,000. The average ground rent payable was £55 invoiced yearly. The lease ran out on 2 August 2078. Taking into account 53 years remaining we estimated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of professional charges.
In 2010 we were called by Mr and Mrs. K Lambert who, having moved into a recently refurbished flat in Bredon in August 2002. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by an additional years. Comparable flats in Bredon with a long lease were in the region of £290,000. The mid-range ground rent payable was £45 collected quarterly. The lease elapsed on 18 March 2098. Having 73 years unexpired we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus legals.