Unfortunately that a Brampton residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Brampton property prices.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips lower than 80 years - otherwise a higher premium will be due. The majority of flat owners in Brampton will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the process.
It is generally considered that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for many years ahead.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with undertake Brampton 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 conveyancer we work with provide it.
During the course of the last few months Reuben, came critically close to the 80-year mark with the lease on his purpose- built apartment in Brampton. Having purchased his property two decades ago, the lease term was of no bearing. As luck would have it, he noticed he would imminently be paying an inflated amount for a lease extension. Reuben extended the lease just in the nick of time last May. Reuben and the freeholder subsequently settled on a premium of £6,000 . If he failed to meet the deadline, the figure would have become more exhorbitant by at least £1,025.
In 2014 we were e-mailed by Mr and Mrs. P Lefèvre who, having acquired a ground floor flat in Brampton in July 2012. The dilemma was if we could approximate the premium could be to extend the lease by an additional years. Similar properties in Brampton with an extended lease were valued about £181,600. The average amount of ground rent was £55 invoiced quarterly. The lease expired in 2077. Considering the 52 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 not including expenses.
Last month we were called by Mr and Mrs. V Martinez , who purchased a first floor flat in Brampton in November 2007. The question was if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparable properties in Brampton with a long lease were in the region of £290,000. The mid-range ground rent payable was £45 invoiced annually. The lease finished on 26 February 2097. Having 72 years outstanding we estimated the premium to the freeholder for the lease extension to be within £11,400 and £13,200 plus legals.