Unfortunately that a Brigg residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the depreciation being disguised by increases in the Brigg property prices.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher amount will be payable. Most flat owners in Brigg will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the process.
Leasehold premises in Brigg with more than 100 years unexpired 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 circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle Brigg 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.
Luca owned a conversion flat in Brigg on the market with a lease of a few days over fifty eight years left. Luca on an informal basis spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Luca to invoke his statutory right. Luca procured expert advice and was able to make a more informed judgement and handle with the matter and sell the property.
Ms Lauren Young took over the lease of a basement apartment in Brigg in August 2010. The question was if we could estimate the premium could be to prolong the lease by a further 90 years. Comparable flats in Brigg with an extended lease were valued around £200,800. The mid-range amount of ground rent was £65 collected monthly. The lease lapsed in 2085. Taking into account 60 years left we approximated the premium to the freeholder for the lease extension to be within £20,900 and £24,200 not including expenses.
Last Autumn we were called by Mr and Mrs. P François , who moved into a studio flat in Brigg in November 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Comparable homes in Brigg with 100 year plus lease were in the region of £255,000. The average ground rent payable was £50 invoiced annually. The lease elapsed on 27 September 2096. Given that there were 71 years unexpired we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus professional charges.