Unfortunately that a South Brent residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the South Brent property market.Once your lease nears 85ish years, you should start thinking about 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 falls under eighty years - otherwise a higher premium will be due. Most leasehold owners in South Brent will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the process.
Leasehold premises in South Brent with more than 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | |
| Godiva Mortgages | |
| Halifax | |
| Nationwide Building Society | |
| Virgin |
The conveyancers that we work with procure 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 conveyancer we work with provide it.
Muhammad owned a high value apartment in South Brent on the market with a lease of just over 59 years unexpired. Muhammad on an informal basis spoke with his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Muhammad to invoke his statutory right. Muhammad procured expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
In 2011 we were phoned by Ms Isabel Thomas who, having acquired a garden apartment in South Brent in April 2012. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Similar residencies in South Brent with a long lease were valued about £264,000. The average ground rent payable was £60 invoiced quarterly. The lease concluded on 10 September 2079. Having 53 years remaining we approximated the compensation to the landlord to extend the lease to be within £37,100 and £42,800 exclusive of costs.
In 2012 we were approached by Mrs R Nelson who, having completed a basement flat in South Brent in March 1995. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Identical residencies in South Brent with 100 year plus lease were valued around £220,400. The average amount of ground rent was £45 collected per annum. The lease end date was on 25 October 2090. Taking into account 64 years unexpired we calculated the premium to the landlord to extend the lease to be between £16,200 and £18,600 exclusive of professional charges.