It’s an underpublicised certainty that a Brough residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Brough property prices.Once your lease gets to 85ish years, you need to start considering 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 falls under 80 years - otherwise a higher amount will be due. The majority of flat owners in Brough will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer for the duration of the formalities.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Brough can be a difficult process. We recommend you procure guidance from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Brough lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Trailing unsuccessful negotiations with the freeholder of her ground floor flat in Brough, Aimee commenced the lease extension process as the eighty year deadline was swiftly nearing. The transaction was concluded in October 2012. The landlord’s fees were negotiated to a tad over 650 GBP.
Last month we were contacted by Mr D Rogers , who bought a studio flat in Brough in April 2012. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparative properties in Brough with an extended lease were in the region of £260,200. The mid-range amount of ground rent was £65 invoiced annually. The lease expiry date was on 18 October 2091. Considering the 66 years as a residual term we calculated the premium to the landlord for the lease extension to be within £16,200 and £18,600 plus professional charges.
Last Summer we were approach by Ms Ella Jones , who took over the lease of a purpose-built apartment in Brough in May 2012. The question was if we could approximate the premium could be for a 90 year lease extension. Identical homes in Brough with a long lease were worth £198,800. The average ground rent payable was £55 collected yearly. The lease ran out in 2080. Taking into account 55 years outstanding we estimated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 not including expenses.