Bromyard leases on domestic properties are gradually losing value. Where your lease has in the region of ninety years left, you should start considering the need for a lease extension. If lease term falls under 80 years, you will then be required to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Leasehold owners in Bromyard will usually qualify for a lease extension; however a solicitor should be able confirm your eligibility. In some circumstances you may not qualify. There are also strict deadlines and steps to comply with once the process has started so it’s best to be guided by a conveyancer during the process.
It is generally accepted that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Halifax | 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
The lawyers that we work with procure Bromyard 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.
Following unsuccessful discussions with the freeholder of her two bedroom apartment in Bromyard, Lauren started the lease extension process just as her lease was nearing the critical 80-year threshold. The transaction completed in July 2013. The freeholder’s costs were kept to an absolute minimum.
Last Christmas we were approach by Mr and Mrs. H Turner , who purchased a first floor flat in Bromyard in January 2011. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Identical residencies in Bromyard with a long lease were in the region of £240,600. The average ground rent payable was £60 billed every twelve months. The lease end date was in 2088. Considering the 62 years outstanding we estimated the premium to the landlord for the lease extension to be within £21,900 and £25,200 exclusive of costs.
Mrs W Nguyen took over the lease of a one bedroom apartment in Bromyard in January 1997. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Similar homes in Bromyard with an extended lease were in the region of £174,200. The mid-range ground rent payable was £55 invoiced quarterly. The lease elapsed in 2077. Having 51 years left we approximated the compensation to the freeholder to extend the lease to be within £31,400 and £36,200 exclusive of legals.