Unfortunately that a Bromley residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Bromley property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If the number of years remaining slips below eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Bromley will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the property will be worth the same as 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. |
| 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you increased control over the value of your Bromley leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Luca was the the leasehold proprietor of a conversion apartment in Bromley being marketed with a lease of a little over fifty eight years outstanding. Luca on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Luca to exercise his statutory right. Luca procured expert advice and secured an acceptable resolution informally and sell the property.
In 2013 we were e-mailed by Mr A Edwards who, having owned a basement flat in Bromley in April 2007. The question was if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Comparable residencies in Bromley with 100 year plus lease were worth £246,800. The mid-range ground rent payable was £60 invoiced yearly. The lease ended on 19 August 2076. Having 50 years left we calculated the compensation to the freeholder to extend the lease to be within £44,700 and £51,600 plus fees.
An example of a Freehold Enfranchisement case for a Bromley residence is Ravensbourne Lodge 4 Highland Road in February 2013. the Tribunal held that the amount payable for the freehold was £22,268