The market value of a leasehold property in Bridgnorth depends on how many years the lease has remaining. If it is near to or less than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when the lease still has 82 years remaining so that all matters can be finalised in advance of the eighty year threshold. Leasehold Reform legislation entitles Bridgnorth qualifying lessees to acquire a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). 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.
Leasehold properties in Bridgnorth with over one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Bridgnorth,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Bridgnorth valuers.
Two years ago Hunter, started to get near to the 80-year threshold with the lease on his basement apartment in Bridgnorth. In buying his property 18 years ago, the lease term was of minimal interest. Fortunately, he noticed he needed to take steps soon on a lease extension. Hunter arranged for a lease extension at the eleventh hour in September. Hunter and the freeholder eventually agreed on sum of £5,000 . If the lease had gone lower than 80 years, the price would have gone up by a minimum £1,025.
In 2011 we were contacted by Dr Eli Patel who, having completed a one bedroom apartment in Bridgnorth in August 1995. The question was if we could approximate the price could be to prolong the lease by a further 90 years. Similar residencies in Bridgnorth with 100 year plus lease were in the region of £290,000. The mid-range amount of ground rent was £45 collected annually. The lease elapsed on 14 February 2098. Considering the 73 years unexpired we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of costs.
Mrs Ella Baker purchased a recently refurbished apartment in Bridgnorth in January 1997. The question was if we could approximate the price would be for a 90 year lease extension. Comparative properties in Bridgnorth with an extended lease were valued about £240,600. The average amount of ground rent was £60 collected annually. The lease ended in 2087. Considering the 62 years as a residual term we estimated the premium to the landlord to extend the lease to be between £21,900 and £25,200 not including expenses.