There is no doubt about it a leasehold flat or house in Brentwood is a wasting asset as a result of the diminishing lease term. If the lease has, in excess of 99 years remaining then this decrease may be of little impact nevertheless there will become a stage 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 increase markedly the cost. It is the primary reason why you should extend the lease sooner as opposed to later. The majority of flat owners in Brentwood will qualify for this right; nevertheless a lawyer can advise 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.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 handle Brentwood 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.
Samuel was the the leasehold owner of a studio flat in Brentwood being sold with a lease of a little over 61 years unexpired. Samuel informally approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Samuel to exercise his statutory right. Samuel procured expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Last Winter we were contacted by Mr and Mrs. R Kelly , who was assigned a lease of a first floor flat in Brentwood in October 2003. The dilemma was if we could shed any light on how much (approximately) price would be to extend the lease by a further 90 years. Similar flats in Brentwood with an extended lease were worth £245,000. The average amount of ground rent was £50 collected every twelve months. The lease came to a finish in 2092. Given that there were 68 years unexpired we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 plus professional charges.
An example of a Lease Extension matter before the tribunal for a Brentwood property is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case related to 1 flat. The unexpired lease term was 57.5 years.