The market value of a leasehold property in Browns Green is impacted by how long the lease has remaining. If it is close to or fewer than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that a lease extension can be addressed in advance of the eighty year mark. Current legislation enables Browns Green qualifying lessees to an additional term of 90 years over and above the existing term, at a peppercorn rent (zero ground rent). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Halifax | 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. |
Regardless of whether you are a tenant or a landlord in Browns Green,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Browns Green valuers.
Last October Thomas, came dangerously close to the 80-year threshold with the lease on his one bedroom apartment in Browns Green. Having purchased his property two decades ago, the unexpired term was of no bearing. by good luck, he noticed he needed to take steps soon on a lease extension. Thomas arranged for a lease extension just ahead of time last August. Thomas and the landlord who owned the flat above subsequently agreed on an amount of £6,000 . If the lease had descended lower than 80 years, the amount would have become more exhorbitant by a minimum £925.
Last year we were approach by Ms F Vincent , who completed a one bedroom flat in Browns Green in November 1999. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparative flats in Browns Green with an extended lease were valued around £176,200. The average ground rent payable was £65 invoiced monthly. The lease terminated in 2082. Taking into account 56 years left we calculated the premium to the landlord for the lease extension to be between £29,500 and £34,000 exclusive of expenses.
Last Summer we were phoned by Mr and Mrs. F Clark , who bought a first floor apartment in Browns Green in January 1995. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by a further 90 years. Comparable homes in Browns Green with 100 year plus lease were valued about £242,600. The average amount of ground rent was £45 collected monthly. The lease elapsed in 2093. Having 67 years outstanding we calculated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 not including costs.