Brough leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Brough tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Brough you would be well advised to investigate if your lease has between seventy and ninety years left. There are compelling reasons why a Brough leaseholder with a lease having around eighty years unexpired should take action to make sure that a lease extension is actioned without delay
Leasehold properties in Brough with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancers that we work with handle Brough 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.
Jonathan owned a studio apartment in Brough being sold with a lease of fraction over fifty eight years outstanding. Jonathan informally contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Jonathan to invoke his statutory right. Jonathan procured expert advice and secured satisfactory resolution without resorting to tribunal and sell the flat.
In 2009 we were contacted by Mrs R Cook who, having took over the lease of a one bedroom flat in Brough in March 2004. The question was if we could approximate the premium could be to extend the lease by 90 years. Similar flats in Brough with an extended lease were valued around £295,000. The average ground rent payable was £50 invoiced per annum. The lease terminated on 19 November 2101. Considering the 75 years remaining we estimated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including expenses.
Mr A Martínez was assigned a lease of a newly refurbished flat in Brough in June 2012. The dilemma was if we could approximate the price could be to prolong the lease by ninety years. Similar premises in Brough with 100 year plus lease were valued about £250,400. The mid-range ground rent payable was £65 billed monthly. The lease terminated on 23 October 2090. Taking into account 64 years remaining we estimated the compensation to the landlord to extend the lease to be between £19,000 and £22,000 exclusive of costs.