When it comes to residential leasehold premises in Bridgnorth, you are in fact renting it for a certain amount of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive especially once there are less than 80 years remaining. Anyone in Bridgnorth with a lease drawing near to 81 years left should seriously consider extending it as soon as possible. Once a lease has fewer than 80 years left, under the current legislation the freeholder is entitled to calculate and levy a greater premium, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold premises in Bridgnorth 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 premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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. |
The conveyancing solicitors that we work with handle Bridgnorth 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 conveyancer we work with provide it.
Two years ago Jamie, came very close to the 80-year threshold with the lease on his garden apartment in Bridgnorth. In buying his property two decades ago, the lease term was of minimal significance. by good luck, he noticed he would soon be paying an inflated amount for a lease extension. Jamie arranged for a lease extension at the eleventh hour last April. Jamie and the landlord who owned the flat above subsequently settled on an amount of £6,000 . If he had missed the deadline, the premium would have escalated by a minimum £875.
Mr Alfie Thomas owned a one bedroom flat in Bridgnorth in June 1999. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Similar homes in Bridgnorth with a long lease were in the region of £210,000. The average amount of ground rent was £50 invoiced per annum. The lease finished in 2105. Having 80 years remaining we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus expenses.
Mr and Mrs. E Laurent moved into a studio apartment in Bridgnorth in June 2001. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year extension to my lease. Identical flats in Bridgnorth with an extended lease were worth £275,000. The average ground rent payable was £45 billed per annum. The lease ran out on 13 February 2094. Considering the 69 years remaining we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including professional charges.