Unfortunately that a Bromyard residential lease is a deteriorating 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 reduction being disguised by increases in the Bromyard property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term falls under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Bromyard will be able to extend under the legislation; however a lawyer should be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in Bromyard,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Bromyard valuers.
Michael was the the leasehold proprietor of a 2 bedroom flat in Bromyard on the market with a lease of just over fifty eight years outstanding. Michael on an informal basis spoke with his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Michael to exercise his statutory right. Michael obtained expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
Dr C Allen owned a studio flat in Bromyard in June 2003. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable premises in Bromyard with a long lease were in the region of £275,000. The average amount of ground rent was £45 billed every twelve months. The lease lapsed in 2094. Given that there were 69 years unexpired we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of fees.
Last Spring we were called by Mr and Mrs. I Patel , who completed a one bedroom flat in Bromyard in October 2001. We are asked if we could estimate the price would be for a ninety year extension to my lease. Similar properties in Bromyard with 100 year plus lease were in the region of £216,000. The mid-range ground rent payable was £60 invoiced per annum. The lease finished in 2083. Considering the 58 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 not including professional charges.