With a residential leasehold premises in Broadway, you effectively rent it for a certain amount of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about extending the lease sooner as opposed to later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than eighty years left. Leasehold owners in Broadway with a lease approaching 81 years remaining should seriously consider extending it sooner rather than later. Once the lease term has fewer than eighty years remaining, under the current statute the freeholder can calculate and levy a greater premium, assessed on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold properties in Broadway with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with handle Broadway 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 eight months of unsuccessful discussions with the freeholder of her studio apartment in Broadway, Lily initiated the lease extension process just as her lease was nearing the all-important 80-year mark. The transaction was finalised in October 2013. The freeholder’s costs were kept to an absolute minimum.
Mr and Mrs. H Petit acquired a basement flat in Broadway in October 1998. The dilemma was if we could shed any light on how much (approximately) price would likely be to prolong the lease by a further 90 years. Comparative premises in Broadway with a long lease were worth £181,600. The average amount of ground rent was £55 invoiced annually. The lease expired in 2078. Taking into account 52 years left we calculated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 not including fees.
Last Christmas we were called by Mr and Mrs. W Green , who owned a first floor apartment in Broadway in August 2011. The question was if we could estimate the premium could be for a 90 year lease extension. Similar residencies in Broadway with 100 year plus lease were valued about £290,000. The mid-range amount of ground rent was £45 collected yearly. The lease concluded on 10 October 2098. Having 72 years remaining we estimated the compensation to the freeholder for the lease extension to be within £11,400 and £13,200 not including fees.