Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Brundall. Inevitably, the period of lease left reduces as time goes by. This is often overlooked and only becomes a problem when the property has to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension. Qualifying long lease owners in Brundall have the legal entitlement to extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. Do give due attention before putting off your Brundall lease extension. Putting off that expense now likely increases the price you will ultimately have to pay for a lease extension
It is generally considered that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you increased control over the value of your Brundall leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy correspondence with the freeholder of her purpose-built flat in Brundall, Alicia initiated the lease extension process as the eighty year threshold was swiftly coming. The legal work was finalised in August 2010. The freeholder’s charges were kept to an absolute minimum.
In 2013 we were phoned by Ms Jessica James who, having acquired a garden flat in Brundall in September 2011. The dilemma was if we could estimate the price would likely be for a 90 year lease extension. Similar premises in Brundall with an extended lease were in the region of £205,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease termination date was on 9 November 2105. Given that there were 79 years outstanding we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus expenses.
Last October we were phoned by Ms A Nelson , who purchased a one bedroom flat in Brundall in September 2012. The dilemma was if we could estimate the price could be for a 90 year lease extension. Comparable premises in Brundall with an extended lease were worth £275,000. The average ground rent payable was £65 collected yearly. The lease came to a finish on 11 May 2094. Given that there were 68 years as a residual term we calculated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.