The market value of a leasehold property in Brighton depends on how long the lease has left to run. If it is near to or less than eighty years you should anticipate difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is ideal to start the process of extending the lease is when a lease still has 82 years unexpired so that a lease extension can be concluded well before the 80 year cut off point. Statute entitles Brighton qualifying lessees to acquire a lease extension of 90 years on top of the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Brighton with in excess of 100 years remaining 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 to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 procure Brighton 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.
In the wake of 9 months of unsuccessful correspondence with the freeholder of her studio apartment in Brighton, Gemma started the lease extension process just as the lease was nearing the critical eighty-year mark. The legal work completed in July 2008. The landlord’s fees were kept to an absolute minimum.
Mr and Mrs. L Bernard purchased a one bedroom apartment in Brighton in June 2009. The question was if we could estimate the premium would likely be to extend the lease by 90 years. Comparative homes in Brighton with an extended lease were worth £246,800. The mid-range amount of ground rent was £60 collected per annum. The lease finished in 2076. Considering the 50 years outstanding we calculated the premium to the freeholder for the lease extension to be between £44,700 and £51,600 not including costs.
Mrs I Rodríguez completed a basement flat in Brighton in January 2007. The question was if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Comparable flats in Brighton with 100 year plus lease were valued about £208,200. The mid-range ground rent payable was £65 collected monthly. The lease came to a finish on 24 June 2087. Taking into account 61 years unexpired we approximated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 exclusive of expenses.