The market value of Browns Green leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate materialy once the unexpired lease term is below than 80 years
Leasehold premises in Browns Green with more than one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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; |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
Lease extensions in Browns Green can be a difficult process. We recommend you procure guidance from a lawyer and surveyor 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 Browns Green lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months Zachary, started to get close to the 80-year mark with the lease on his garden flat in Browns Green. In buying his flat two decades ago, the length of the lease was of minimal concern. Fortunately, it dawned on him that he needed to take steps soon on Extending the lease. Zachary arranged for a lease extension at the eleventh hour in June. Zachary and the freeholder ultimately agreed on the final figure of £6,000 . If he not met the deadline, the price would have become more costly by a minimum £1,050.
In 2010 we were called by Ms D Smith who, having owned a one bedroom apartment in Browns Green in September 2012. We are asked if we could estimate the price would likely be to extend the lease by a further 90 years. Similar residencies in Browns Green with an extended lease were worth £166,400. The mid-range amount of ground rent was £60 collected every twelve months. The lease concluded in 2079. Considering the 54 years left we estimated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 plus professional charges.
In 2013 we were approached by Dr Eli Phillips who, having took over the lease of a one bedroom apartment in Browns Green in May 2003. The question was if we could estimate the price would be for a 90 year extension to my lease. Comparable properties in Browns Green with 100 year plus lease were in the region of £227,800. The average amount of ground rent was £45 billed yearly. The lease elapsed in 2090. Taking into account 65 years unexpired we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 not including expenses.