Unfortunately that a Brockenhurst residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Brockenhurst property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Brockenhurst will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer from beginning to end of the formalities.
It is generally considered that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Brockenhurst 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.
In the wake of eight months of unsuccessful discussions with the freeholder of her one bedroom flat in Brockenhurst, Gemma initiated the lease extension process just as the lease was approaching the critical eighty-year threshold. The lease extension was finalised in February 2005. The landlord’s fees were restricted to a tad over 650 GBP.
Last Spring we were approach by Dr Matthew Vincent , who was assigned a lease of a first floor flat in Brockenhurst in July 1997. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Identical properties in Brockenhurst with an extended lease were valued around £295,000. The average ground rent payable was £45 billed annually. The lease terminated in 2100. Taking into account 74 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including professional charges.
Last February we were contacted by Mr and Mrs. H Fournier , who purchased a one bedroom apartment in Brockenhurst in May 2006. The dilemma was if we could estimate the price would likely be to extend the lease by ninety years. Comparative premises in Brockenhurst with an extended lease were worth £243,000. The mid-range amount of ground rent was £65 collected per annum. The lease ran out on 5 May 2089. Given that there were 63 years outstanding we approximated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 plus professional charges.