The market value of Brighton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate materialy once the remaining term is less than 80 years
Leasehold properties in Brighton with over 100 years unexpired on the lease are often 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 purchasing the freehold unless savings on ground rent and service charges justify 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with undertake 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 conveyancing solicitor we work with provide it.
Austin was the the leasehold proprietor of a 2 bedroom apartment in Brighton on the market with a lease of just over 61 years left. Austin on an informal basis spoke with his freeholder being a well known local-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Austin to exercise his statutory right. Austin obtained expert advice and secured satisfactory deal informally and ending up with a market value flat.
Last Summer we were called by Mr and Mrs. R Green , who took over the lease of a garden flat in Brighton in May 1999. The dilemma was if we could estimate the price would be to prolong the lease by 90 years. Identical properties in Brighton with an extended lease were in the region of £208,200. The average amount of ground rent was £65 collected every twelve months. The lease terminated on 9 March 2086. Having 61 years remaining we estimated the premium to the landlord to extend the lease to be within £20,000 and £23,000 not including costs.
Last Christmas we were e-mailed by Mr and Mrs. V Howard , who moved into a one bedroom apartment in Brighton in June 2001. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparable properties in Brighton with an extended lease were in the region of £260,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease came to a finish in 2097. Given that there were 72 years left we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus legals.