It’s a harsh truth that a Browns Green residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Browns Green property prices.Once your lease gets to 85ish years, you should start thinking about 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 lower than 80 years - otherwise a higher premium will be due. Most flat owners in Browns Green will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
The lawyers that we work with procure Browns Green 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.
After unsuccessful discussions with the landlord of her studio flat in Browns Green, Kate initiated the lease extension process as the 80 year mark was rapidly coming. The transaction was concluded in October 2014. The freeholder’s fees were negotiated to about 550 GBP.
Last Summer we were phoned by Dr L Roux , who bought a recently refurbished flat in Browns Green in June 2006. We are asked if we could approximate the price could be to extend the lease by a further 90 years. Identical residencies in Browns Green with an extended lease were worth £208,200. The average amount of ground rent was £65 invoiced per annum. The lease termination date was in 2086. Given that there were 61 years left we calculated the compensation to the landlord for the lease extension to be between £20,000 and £23,000 plus costs.
Last month we were contacted by Mrs O Thompson , who owned a purpose-built flat in Browns Green in March 2007. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparative flats in Browns Green with a long lease were in the region of £260,000. The mid-range ground rent payable was £50 invoiced yearly. The lease elapsed in 2097. Considering the 72 years remaining we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of costs.