When it comes to long leasehold premises in Broadstairs, you are actually purchasing an entitlement to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease gets disproportionately more expensive notably once there are less than eighty years remaining. Leasehold owners in Broadstairs with a lease drawing near to 81 years remaining should seriously think of extending it as soon as possible. When a lease has less than 80 years outstanding, under the relevant legislation the landlord can calculate and charge a greater premium, based on a technical multiplication, strangely termed as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with procure Broadstairs 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.
Dexter owned a conversion flat in Broadstairs on the market with a lease of a few days over 61 years remaining. Dexter on an informal basis contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Dexter to invoke his statutory right. Dexter obtained expert legal guidance and secured satisfactory deal without going to tribunal and ending up with a market value flat.
In 2012 we were approached by Dr G Bennett who, having acquired a one bedroom flat in Broadstairs in February 2001. We are asked if we could approximate the premium would likely be to extend the lease by a further 90 years. Comparable flats in Broadstairs with 100 year plus lease were in the region of £191,400. The mid-range ground rent payable was £55 billed monthly. The lease came to a finish in 2079. Taking into account 54 years outstanding we estimated the compensation to the landlord to extend the lease to be within £34,200 and £39,600 plus costs.
Mr and Mrs. E Bertrand completed a studio apartment in Broadstairs in June 1998. The dilemma was if we could approximate the premium could be to extend the lease by an additional years. Similar flats in Broadstairs with an extended lease were valued about £295,000. The mid-range ground rent payable was £45 collected every twelve months. The lease terminated in 2099. Having 74 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including legals.