It’s an underpublicised truth that a Brownhills residential lease is a deteriorating asset. As the lease term reduces 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 Brownhills property prices.Where your lease has approximately ninety years left, 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 slips lower than eighty years - otherwise a higher amount will be payable. The majority of flat owners in Brownhills will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold premises in Brownhills with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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. |
Retaining our service will provide you better control over the value of your Brownhills leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Harvey, came seriously near to the eighty-year threshold with the lease on his leasehold apartment in Brownhills. Having bought his flat 18 years previously, the lease term was of little relevance. Thankfully, he noticed he needed to take action soon on Extending the lease. Harvey extended the lease just under the wire last May. Harvey and the landlord who owned the flat above eventually settled on the final figure of £6,000 . If he failed to meet the deadline, the sum would have gone up by a minimum £1,000.
Last Summer we were phoned by Ms H Taylor , who bought a one bedroom apartment in Brownhills in October 2007. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative properties in Brownhills with 100 year plus lease were in the region of £250,400. The average ground rent payable was £65 collected annually. The lease elapsed in 2090. Considering the 64 years left we calculated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 plus professional charges.
Last Spring we were called by Mr and Mrs. C Phillips , who purchased a one bedroom flat in Brownhills in November 1995. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Similar flats in Brownhills with a long lease were valued about £189,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease ran out in 2079. Taking into account 53 years left we estimated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of fees.