The re-sale value of a leasehold property in South Brent is impacted by how long the lease has remaining. If it is near to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years unexpired so that formalities can be concluded in advance of the 80 year threshold. Statute enables South Brent qualifying lessees to a ninety year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in South Brent with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Birmingham Midshires | 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancers that we work with undertake South Brent 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.
Ibrahim was the the leasehold proprietor of a conversion flat in South Brent being sold with a lease of a few days over 61 years remaining. Ibrahim informally approached his freeholder a well known London-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 yearly. No ground rent would be due on a lease extension were Ibrahim to exercise his statutory right. Ibrahim procured expert advice and secured an acceptable resolution informally and readily saleable.
In 2012 we were contacted by Dr K Gray who, having bought a one bedroom apartment in South Brent in May 2006. The question was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative properties in South Brent with an extended lease were in the region of £193,400. The mid-range ground rent payable was £65 collected annually. The lease termination date was in 2084. Considering the 59 years as a residual term we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 plus costs.
In 2014 we were called by Dr A Adams who, having was assigned a lease of a one bedroom apartment in South Brent in February 1995. We are asked if we could estimate the price could be for a ninety year extension to my lease. Comparative residencies in South Brent with a long lease were valued around £255,000. The mid-range ground rent payable was £50 collected per annum. The lease came to a finish in 2095. Considering the 70 years outstanding we estimated the premium to the freeholder for the lease extension to be within £10,500 and £12,000 exclusive of professional charges.