The market value of a leasehold property in Brixham depends on how many years the lease has left to run. If it is close to or less than eighty years you should anticipate difficulties on re-sale, so it is advisable to arrange for a lease extension before purchasing. It is preferable to start the process of extending the lease is when the lease still has 82 years unexpired so that formalities can be concluded well before the eighty year mark. Leasehold Reform legislation enables Brixham qualifying lessees to an additional term of 90 years in addition to the existing term, at a nominal rent (no ground rent). The reason of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| Birmingham Midshires | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 lawyers that we work with handle Brixham 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.
Two years ago Luca, started to get close to the eighty-year threshold with the lease on his one bedroom apartment in Brixham. Having purchased his home two decades ago, the unexpired term was of minimal concern. Thankfully, he became aware that he needed to take steps soon on a lease extension. Luca arranged for a lease extension just ahead of time in April. Luca and the freeholder subsequently agreed on an amount of £5,000 . If he not met the deadline, the sum would have escalated by at least £850.
In 2013 we were phoned by Ms N David who, having owned a basement apartment in Brixham in January 2006. We are asked if we could approximate the premium could be to extend the lease by a further 90 years. Identical premises in Brixham with a long lease were worth £235,200. The mid-range ground rent payable was £45 collected yearly. The lease termination date was in 2092. Given that there were 66 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of expenses.
In 2011 we were e-mailed by Mr and Mrs. E Hall who, having completed a first floor apartment in Brixham in March 2000. The dilemma was if we could approximate the premium could be for a 90 year lease extension. Identical properties in Brixham with 100 year plus lease were in the region of £280,000. The average amount of ground rent was £55 invoiced yearly. The lease finished on 8 September 2103. Considering the 77 years outstanding we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of professional charges.