With a residential leasehold property in Broseley, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive notably when there are fewer than 80 years remaining. Leasehold owners in Broseley with a lease approaching 81 years left should seriously think of extending it without delay. When a lease has below eighty years outstanding, under the relevant legislation the freeholder can calculate and demand a greater amount, based on a technical multiplication, strangely termed as “marriage value” which is due.
Leasehold properties in Broseley with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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 handle Broseley 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 conveyancing solicitor we work with provide it.
During the course of the last few months Luke, started to get near to the 80-year threshold with the lease on his leasehold flat in Broseley. In buying his flat 18 years previously, the unexpired term was of little concern. Fortunately, it dawned on him that he needed to take action soon on Extending the lease. Luke extended the lease just in the nick of time last January. Luke and the freeholder via the management company subsequently agreed on an amount of £5,000 . If the lease had slipped below 80 years, the amount would have increased by a minimum £950.
Mr and Mrs. P Hernández completed a first floor apartment in Broseley in October 2001. The question was if we could estimate the price would be to prolong the lease by a further 90 years. Similar flats in Broseley with a long lease were worth £270,000. The mid-range amount of ground rent was £55 collected monthly. The lease lapsed on 8 November 2101. Taking into account 75 years left we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 not including costs.
In 2013 we were phoned by Mrs D Martinez who, having owned a one bedroom flat in Broseley in November 1998. The dilemma was if we could shed any light on how much (approximately) premium would likely be to extend the lease by an additional years. Identical properties in Broseley with a long lease were in the region of £173,800. The mid-range ground rent payable was £60 collected monthly. The lease came to a finish in 2081. Taking into account 55 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 not including professional charges.