Bruton leases on residential properties are gradually losing value. Where your lease has in the region of 90 years remaining, you should start thinking about a lease extension. Eighty years is a significant number: when the unexpired term of a lease dips below this level then you start paying an additional element called marriage value. Leasehold owners in Bruton will usually be legally entitled to a lease extension; however it’s a good idea to check with a conveyancer to confirm if you qualify. In certain cases you may not qualify. There are prescribed timetables and steps to follow once the process is triggered so it’s sensible to be guided by a conveyancing solicitor during the process.
Leasehold residencies in Bruton with over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you better control over the value of your Bruton leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Jack, started to get close to the 80-year threshold with the lease on his basement apartment in Bruton. Having purchased his flat 19 years previously, the unexpired term was of little bearing. by good luck, he noticed he would imminently be paying an inflated amount for a lease extension. Jack was able to extend his lease just under the wire last June. Jack and the landlord in the end settled on a premium of £5,000 . If he not met the deadline, the amount would have gone up by a minimum £950.
In 2010 we were approached by Dr T Alexander who, having purchased a purpose-built flat in Bruton in April 2003. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by an additional years. Identical premises in Bruton with a long lease were in the region of £206,200. The average ground rent payable was £60 collected per annum. The lease terminated in 2082. Given that there were 56 years remaining we approximated the premium to the landlord to extend the lease to be between £31,400 and £36,200 not including fees.
Last month we were called by Dr Owen Carter , who took over the lease of a ground floor apartment in Bruton in August 2011. We are asked if we could approximate the price would be to prolong the lease by 90 years. Identical homes in Bruton with an extended lease were worth £300,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease finished in 2102. Having 76 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus legals.