As the length of the unexpired term of a South Brent residential lease lessens so does its value and therefore the value of your property. Where the lease has, beyond one hundred years to run then this decrease may be of little impact however there will become a point in time when a lease has under than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main rational as to why you should extend the lease sooner rather than later. Many flat owners in South Brent will qualify for this right; however a lawyer can confirm if you qualify to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold properties in South Brent with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you increased control over the value of your South Brent leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Muhammad owned a conversion apartment in South Brent on the market with a lease of fraction over 59 years left. Muhammad on an informal basis contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Muhammad to exercise his statutory right. Muhammad obtained expert advice and was able to make an informed decision and deal with the matter and sell the property.
Last January we were called by Dr Ali Bailey , who completed a one bedroom apartment in South Brent in July 2002. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Similar flats in South Brent with a long lease were in the region of £250,000. The average amount of ground rent was £50 collected yearly. The lease terminated in 2094. Taking into account 69 years outstanding we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
Mr O Anderson took over the lease of a purpose-built apartment in South Brent in October 2001. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparative premises in South Brent with an extended lease were valued around £285,000. The mid-range amount of ground rent was £55 billed per annum. The lease expired in 2105. Given that there were 80 years remaining we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of expenses.